Free software must be free for all its users. The most common example of this is a license that restrict fields of endeavor.
E.g. I could make a license exactly like the GPL except with a clause saying fuzzy2 on HN can't use my software without paying me.
Even though RedHat and Debian aren't fuzzy2 on HN, and 99.99...% (or 100%) of their users aren't that user either, they'd still refuse to distribute it. That license would be non-free.
I think the parent was commenting that since Red Hat did not offer a service, there is no legal restriction in distributing the code. In other words, if Red Hat decided to change its stance on distributing only free software, they could do so legally. I'm glad they didn't, but I think the parent is correct.
Edit: Usually don't complain about down votes, but I'd be happy to hear why the parent is incorrect if I've got it wrong. Are they not legally able to distribute for some reason?
Re-Edit: I read the initial query incorrectly. Yes, the parent's post is unrelated to the query. Sorry!
There is plenty of non-free software that a distro can legally distribute.
They still usually don't, because it would break the automatically trouble-free property of their distribution. If users have to check the license of software before using them, there is little point in packaging all of it together and automatically installing, so there is little point on making a distro at all.
