The issue is there are a few ways of doing open source wrong.

The biggest way to do it wrong is to try to sell the open source product while giving the source away for free. Because that means, there will be someone else who just takes the source and copies it with no or only minor changes (e.g. replacing logos and names).

The copyists always have an huge competitive advantage, since they don't have to pay for development. Especially for software, development makes up almost all of the cost, so that essentially means they can give away the product for almost free and still make a profit. Or they are open source spirited themselves and give it away completely for free, like CentOS.

Sure, Red Hat can actually develop features that customers are asking for, which CentOS can't really do, since they can't influence Red Hat's roadmap, but considering that Red Hat is asking for $350 for a server license, a free-and-good-enough alternative seems to be the better option for many.

According to Wikipedia, CentOS is much more popular (or at least was in 2021) than Red Hat Enterprise Linux.

So to do Open Source right, you need to make money from developing it. This is e.g. how the Linux kernel works. They don't sell the kernel, but instead many companies fund kernel development either financially or through dedicating developers to that project. There are e.g. a lot of devs employed by Microsoft who are working on the Linux kernel.

This gives these companies the ability to prioritize what features/bugs should be worked on.

But this model doesn't fit every product and thus not every product can be financially viably done in Open Source.