I generally agree that a strong product will still be profitable even if it's open source.  However, the question remains of how the developer gets paid.

With open-source code, anyone can build and run it, at least in theory, so you can't easily charge per-download or per-license key like some closed-source projects.

If you have a client-server model, you could charge for server usage and earn money that way.  That applies less to Nostr, though, due to the distributed relay model.

One option I may explore in the future is a paid early access.  Maybe v1.0 is free, but higher versions with new features are closed-source and behind a paywall.  So users who want the latest and greatest features can pay to see them sooner, but the free user base continues to receive maintenance and support.