The license is not unusual. What is unusual is that Google appears to be writing a new mobile operating system. Is this someone's 20% time project? What is the use case for Google?
Google needs an OS that works better for realtime applications like VR/AR and robotics. Note how they spelled out how it is designed for a non-trivial amount of RAM. This is in contrast to the tiny hardware that a realtime OS would typically run on.
Personally, I'm hoping that this is a cleaner foundation for Android that we can all use to build more advanced AR and robotics applications.