You can tell by Mark's wording and body language when he talks about it in the recent Lex Fridman episode. I got the impression from him that he would have released it in a manner closer to that of open source if there wasn't a question of legal liability.
Why couldn't they distribute it? They clearly could have. There's no law against it.
Perhaps you meant that they were nervous about companies using it commercially and either bringing them bad press or making money off their work? That's clearly why they only released it for researchers.