Yes, your license means that individual users can make little patches to customize the product to their needs, and even share these customizations with other users. That's great!
But the license effectively prohibits borrowing code from your codebase for use in other projects, meaning your code does not become part of the aether of Open Source code that anyone can build upon. That's a very important part of what it means to be "Open Source".
It also effectively prevents any large-scale modification or forking effort, since maintaining patches as the underlying codebase evolves is a hard job, and the license prohibits people from funding such effort. If users want timely security updates, they will need to stick close to your version of the codebase. So the lock-in is there.
Again, this is all a perfectly justified direction for you to take. I don't blame you at all, and I definitely understand that it's Amazon's fault that we cannot have nice things. But it's not Open Source.
On a tangentially-related note, a little tip: You have defined all noncommercial organizations -- including education, public research, and government -- as being permitted users. That may be dangerous. I was the founder of Sandstorm, and these organizations were exactly the ones most interested in paying for our product -- literally the only big sales we ever made were a couple universities, a big research org, and a government. Despite being non-profit, these orgs have lots of money and a need for self-hosting.
