That sounds like a morality clause - i.e. they intend to deny access to the software to entities engaged in child labor. Putting aside whether or not 'good' people should deny 'evil' people access to FOSS, and if we can even agree on a consistent set of morals to embed in our licenses[0], the main problem with these licenses is getting courts to correctly interpret them as we intend.
Copyright is a virus that creators can use to harm people who use their creative work, so any ambiguity in licensing at all is a trap that can be sprung at any time to subject users to billion dollar lawsuits. In fact, you already pointed out one. Conversely, any tightly drafted morality clauses is likely going to be easily worked around by exactly the kinds of organizations you want to exclude from use of your software.
To make things even worse, there's this weird trend of postmodern licensing, where you deliberately write licenses that are difficult to interpret[1]. Licenses that only apply to the dead, or extremely vague "software must be used for Good, not Evil, as we interpret it" kinds of morality clauses that I railed against above. If combined with a real license, these are harmless (because you can just take the actually FOSS terms). But standalone, these are all very expensive and dangerous rugpulls waiting to happen.
[0] For example: should Planned Parenthood, the National Rifle Association, and/or the American Civil Liberties Union be allowed to use Ethical Source licensed code?
[1] Stuff like WTFPL could at least be construed as a weirdly drafted permissive license.
Copyright is a virus that creators can use to harm people who use their creative work, so any ambiguity in licensing at all is a trap that can be sprung at any time to subject users to billion dollar lawsuits. In fact, you already pointed out one. Conversely, any tightly drafted morality clauses is likely going to be easily worked around by exactly the kinds of organizations you want to exclude from use of your software.
To make things even worse, there's this weird trend of postmodern licensing, where you deliberately write licenses that are difficult to interpret[1]. Licenses that only apply to the dead, or extremely vague "software must be used for Good, not Evil, as we interpret it" kinds of morality clauses that I railed against above. If combined with a real license, these are harmless (because you can just take the actually FOSS terms). But standalone, these are all very expensive and dangerous rugpulls waiting to happen.
[0] For example: should Planned Parenthood, the National Rifle Association, and/or the American Civil Liberties Union be allowed to use Ethical Source licensed code?
[1] Stuff like WTFPL could at least be construed as a weirdly drafted permissive license.