"...giving licensees the right to view and modify the source and integrate it with their own software, but not the right to redistribute, is to me a good middle ground for a lot of projects."
Licensees have that right with (most) free software licenses.
The downside of this is that, if the owner, Epic say, is not interested in changes you need, then you cannot distribute those changes no matter how valuable they are to you or anyone else. Further, you will have to maintain those changes in the face of whatever architectural differences the owner decides to introduce.[1] You are in the same position as the good old days of proprietary software (Believe me, you could absolutely pay IBM to make changes its OS's. If you were, say, Ford.) except that you get to see the source. Yay.
[1] Yes, you should be expected to maintain your own changes if the original maintainers don't want to. However, that's significantly more difficult if the owner is uninterested in your features or is actively trying to break you. (Microsoft waves in the distance.)
Licensees have that right with (most) free software licenses.
The downside of this is that, if the owner, Epic say, is not interested in changes you need, then you cannot distribute those changes no matter how valuable they are to you or anyone else. Further, you will have to maintain those changes in the face of whatever architectural differences the owner decides to introduce.[1] You are in the same position as the good old days of proprietary software (Believe me, you could absolutely pay IBM to make changes its OS's. If you were, say, Ford.) except that you get to see the source. Yay.
[1] Yes, you should be expected to maintain your own changes if the original maintainers don't want to. However, that's significantly more difficult if the owner is uninterested in your features or is actively trying to break you. (Microsoft waves in the distance.)