Red Hat's source code for RHEL (Red Hat Enterprise Linux) was previously publicly accessible, even if you were not a customer. Now only customers may get access to the source code (which is allowed by the GPL since source code only has to be delivered to those who have received binaries generated from it). But there are Linux distributions who use Red Hat's publicly available sources to create RHEL "clones" (in quotation marks because they obviously don't pretend to be RHEL), except without providing the corporate support one would receive for being a RHEL customer. They do have community forums though.

The superficial issue is that those "clone"-distros would have to either purchase a RHEL license or apply to one of Red Hat's other programs to access the sources for their own distro. The actual issue is that Red Hat's terms for being a customer are that they'll kick you out if you use that code to redistribute your own versions of it (or, god forbid, even create a full distro from it).

Since CentOS proper was killed off years ago, many people who wanted a Red Hat compatible server distro but didn't want or need commercial support shifted their systems to the aforementioned other "clone"-distros, which are now in danger of disappearing because of that change.

Is Red Hat legally able to do it? Yes. Is it a dick move? Absolutely. Will it help spread the popularity of RHEL or other Red Hat distros? Absolutely not.