this appears to be a very reasonable move

There are a few problems with this:

1. The company wasn't ready for the concessions it had to make when they started the project as open source. This though, may be the most forgivable issue. They couldn't have predicted that big parasitic SaaS and LLM players would make their business unviable.
2. There may be some contributors who wouldn't have contributed if they knew this was going to happen. Generally speaking, never sign away your rights. CLA and copyright assignments should be avoided like plague. The maximum you should settle for as a contributor is a DCO.
3. Hashicorp is still trying to pass this off as open source of sorts. They say nothing has changed. But this change puts them squarely outside the definitions put forth by either FSF or OSI. This will cause their ejection from several software repositories. They should just be honest about it.

The biggest problem I see is that you can suddenly become non-compliant just because Hashicorp decides to release a new service (i.e.they start competing with you, rather than the other way). It can be a huge risk for companies.