I'm unsure what legal advice or background the MS/Extra team has, but your *NEW* licesnse terms will stiffle development.
With the background I have in law, I would say that you have essentially limited distribution - and this is totally different to copyright law. There are separate and very different laws regarding distribution (contract law) vs copyright (which is a law in itself).
If you publish your works (eg. MS2 3.1.4) freely for people to download and use, with all the source code etc (and you have) and then you don't include a distribution license (and you didn't) then copyright law does not come into play in terms of distribution. As long as I continue to distribute your works as you (and I have) I can add/remove whatever I like and not come into the scope of breaking any copyright law. You may not like this, but this is the facts and is similar across the globe where each country has implemented copyright law. This is why the Open Source software movement is so complex and deep - you've failed to look into this thoroughly and my assessment was that you essentially didn't care how the works were distributed and how derivatives were constructed.
What you have done in 3.2.0 is ADD a brand new licesnse that restricts distribution of any type of derivative works without permission, and so THIS WILL stifle development as per Black99rt's quote...
Lets make it clear- This means nobody can send anyone else an .s19 that is not official or officially recognized by the copywrite holders? Correct? This is going to stifle alpha development testing for third party contributors.
If the attempt here is to "reduce confusion over different works" as you say, then a simple communication explaining what you want users to do would be simple and less restrictive for the Megasquirt community. One of the overwhelming benefits to me for coming to Megasquirt was the appearance of open source code and community works - this seems it has now changed.
Hard to predict what long term effects this move will have, but other similar communities collapse fairly quickly after this type of action, and as we all know history tends to repeat. One could probably plough ahead and do whatever they like, and ignore these new license terms - you'll no doubt have a very hard time starting any real legal effort to restrict their actions - the costs alone with be prohibitive on a global scale.
Makes you wonder what thinking went into this move?
Interesting times indeed.
G