To add to the license complexity, the model uses another FUTO-written license, though it at least does not seem as bad as the license for the keyboard:
The clause you cited as well as the "Termination" section and the non-commercial restriction make it a non-free license. Besides the direct issues with that, it also means all software covered by this license is unsuitable for FOSS-only distributions like Debian or F-Droid. It's not entirely clear to me if the license is copyleft; derivative works have similar problems if so.
As an aside, Eron Wolf, the billionaire behind FUTO, has some rather... out of touch views[0] on the meaning of open source, and seems very committed to diluting the term to mean something closer source-available by removing the most of the rights granted (as defined by FSF, OSI, DFSG and others).
https://huggingface.co/futo-org/futo-swipe/blob/main/LICENSE...