Yeah, it's not compatible with the GPL or the AGPL, you are correct. However, it would be compatible with other FOSS licences as long as you abide by the added restrictions.
The fact that many people say that you can't call it "open source" if it doesn't grant the user the four OSI freedoms.... even though they don't have a trademark on the expression "open source".
I own and operate a chicken farm. I raise my chickens ethically, and I say so on my website. But I get angry emails from activists saying that it is unethical to farm chickens at all, no matter how I do it. To support their argument, they link to a PETA website saying as much. So I hatch a plan, I lobby PETA to change their espoused principles. Amazingly, PETA acquiesces and endorses my business. What happens next?
What happens next is those activists still send me hate mail, and now they also send PETA hate mail as well. The people who previously cited PETA to defend their position aren't swayed by PETA's change of policy. They were never taking marching orders from PETA in the first place. They previously liked PETA because PETA aligned with their values, but PETA no longer aligns with their values so now they've got a beef with me and PETA.
Do you see what I'm saying here? Open source / Free Software activists don't take marching orders from the OSI or FSF. We cite those organizations because those organizations align with our beliefs. Should those organizations change, our beliefs would not. The Zeroth software freedom isn't something we fight for because some organization tells us to, it's something we fight for because we believe in it. You can't change this by getting the OSI to change their website.
Terms of art are as important as company-owned trademarks for consumer protection. Don't try to deceive users about what your license is by calling it something that already has a different meaning and you won't get any complaints.