[mooreds]

FusionAuth does this. We have a free as in beer downloadable solution with our own software license (available on our site). I am an employee.

Benefits: no risk of hyperscaler takeover or fork or future software licensing fiasco, business model of selling software is proven, either license or SaaS

Challenges: no halo effect, harder to get contributions (but you can do 'open development' and get bugs and feature requests from community; we do), some devs get less excited about solution, have to address continuity concerns earlier (maybe?)

We have a FAQ on our site addressing this question.

Hard to tell about community engagement because straight comparisons are hard, but it definitely retards uptake to some extent. Using a free downloadable option can help; we definitely have customers who kick tires before they talk to us.

Really depends on your target market too: devs care more about OSS, business users don't.