Several things, but the issues focus around the company running the show, rather than the API. Their 'binding rules' have an outrageous number of loopholes.
"We won't sell any assets ever! Unless... someone buys us. Or if we decide there's a benefit to selling the assets."
"We reserve the right to do whatever we deem fit with non-profit money, so long as it benefits matrix."
Matrix was 'de-federated' from Libera.chat because Matrix admins refused to properly moderate their servers, respect privacy, maintain reciprocity, etc. There's a whole letter explaining the hair ball that occurred.
Their explicit goal is monopoly. Every thing should use our API. Everyone should federate. (Share your data with our servers.)
Companies are companies. Non-profits included. Non-profits are just a way of saying, "We're not going to the stock market, but we can still funnel money into various pockets... especially our own, or people we want to pay money to."
Foss/Floss is about ownership, control, modifiability, ect. being handed to whoever owns it. Matrix is about ownership being shared with Matrix.
It's a wondrous API. Everyone should use it, and set up their own private self-cleaning servers.