Blheli32 is no more, servers are down, flashing is disabled

the hex files are useless, you cant flash it without the server.

Really? I remembered a point where the Suite asks to flash a custom local firmware from file, am I wrong?

it still authenticates with the server.

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If they stop operation, why not release it as open source … ?

They stopped operation to stop the war. Releasing it as opensource would allow the war to continue.

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More likely to stop export to entities under sanctions, after a warning from the government.

If they wanted to stop the war they likely would have stopped sooner.
Much easier than implementing KYC.

I suspect the problem is their business model, they licence the firmware to Chinese manufacturers, they have no control over where it goes after that so they cant just cut off supply to a specific user.