> What should they do?
Suck it up, open source Terraform under a non profit foundation, find a new source of revenue. Or stop developing Terraform, cut expenditures, and move on with life.
There's no universe where "bait and switch customers who wanted open source into paying us by switching licenses" is a viable option.
> So, just because people adapted it, and HashiCorp cannot survive, should they say, we're closing shop, it's all MIT now, do whatever you want, bye!?
Exactly, you know the answer, you just don't like the implications. People somehow think that a business which started an open source project "deserves" to profit from it. They do not. Open source is a great way to get people to know who you are and build things that are interoperable with your (proprietary, closed source) SaaS offerings. It is not in itself a revenue source.
If the viability of your business is predicated on being the only one able to provide your project as a service and earn that service revenue gravy, just leave it closed source and proprietary. Sure, you won't get adoption at anywhere near the rate, but that's the tradeoff you make.