Any definition of open source that doesn't include the public domain is out of touch with how real people use the words "open source" and is therefore useless. You can make up any definition you want, but if you insist on calling elephants "bananas", I'm not going to take you seriously
The problem with your analogy is that open source has a definition. As does public domain. As do elephants and bananas.
In your analogy we're not the ones calling elephants bananas, you are. We want to keep calling one bananas and the other elephants. You are suggesting that since elephants are similar to bananas you can simply use either word.
Legally, Open Source and Public Domain are -very- different animals. Open Source comes eith a copyright, and a license (which has requirements), public domain does not.
Of course public domain and open source are both "shipped as source code". Then again so is a fair bit of proprietary software. That doesn't make it open source either.
How people use the term "fair use" is out of touch with the legal definition. That doesn't change the legal definition, it means people use the term incorrectly.
It means the common use of "fair use" is different to the legal definition. It doesn't mean either are wrong. It isn't wrong to say a tomato is a vegetable. In common use it is.
Similarly the common use of "open source" is different to the OSI's preferred definition. Note that the OSI's preferred definition is not a legal definition. It's just what they prefer.
I read the text: it's license hermenuetics at best and FUD at worst. Has there been a single instance in recorded history of the author of a public domain work trying to enforce usage, modification, or distribution permissions. Sure, you can point to theoretical variation in the precise semantics of the public domain in various jurisdictions, but it feels like a bar exam puzzle, not a real world practical concern. In the real world, you can safely do whatever you want with public domain software. It counts as free software. That half the planet nowadays uses SQLite and treats it as free software is testament to this reality. Obscure license pedanticism just doesn't inform the choices of anyone actually building.
Open source and Free software have different philosophies, but in practice they are essentially the same. You are thinking about copyleft vs non-copyleft. BSD, MIT, CC0 are all Free Software licenses but not copyleft.
You’re making the common mistake of confusing the copyleft vs. permissive distinction with the free software vs. open source distinction.
GPL is copyleft. MIT, BSD etc. are permissive. But all of those are both free software and open source, which are essentially synonyms.
The reason so many people get confused by this is that some of the people who prefer copyleft licenses (notably the FSF) also tend to prefer the term “free software”, for philosophical reasons.
It might seem really unlikely any acquirer would ever sue, but if your big company has compliance auditors they will need to see something in black and white.