The part I still have trouble with is this:
In particular, providing copies to contractors for use off-site is distribution.First, why does off-site matter? If I bring contractors into my building, that's not distribution. If I send the code to my branch office in another state, that's not distribution. If I give the code to the contractor next-door to me now it's distribution?
Second, if the contractor works from home and claims a tax deduction on his home office as a place of work, couldn't that be considered "on-site"?
I'm getting the feeling "distribution" needs to be defined better. The GPL describes what rights and obligations you have when distributing, but only the FAQ makes any attmept to define what counts as distribution. And the FAQ isn't part of the license.