It turns out Valve has placed a huge caveat on using Source 2, their free engine. You need to make your games on Steam.
To be specific, the condition is that the game needs to launch on Steam. It’s not as strict as Microsoft’s [email protected] policy, so you don’t have to go Steam before anyone else, and you can still place it anywhere.
While one can argue most devs will want their games to be on Steam in the 1st place, it’s still definitely a limitation that its competitors Unreal and Unity don’t have. Ultimately, the best engine for a dev boils down to their personal circumstances.
Image is from a Left4Dead demo of the Source 2 engine.