As far as
> when faced with a choice between being liable for their own code or being liable for open source code, most companies will choose to write their own code. If so, that would be a net harm to open source and user freedom
goes, even if that is true (I'm not really convinced) it doesn't really matter. What matters is finding the correct answer to "who is responsible" to which the answer can't be "nobody". And if it can't be nobody, then it must be somebody. And if it must be somebody, it absolutely shouldn't be some random guy who never specifically signed off on your usage of their open source code.
I think that's more-or-less fine. There's a concern that companies don't want to be responsible for open source code, and will write everything in-house instead. I wouldn't be surprised if some companies do that, even if it's a bad idea. I don't know how common it'll be, but the worst case scenario is that it turns out to be bad for developers and for free software.
The second, murkier issue, is what happens when there is no selling involved at all. If I download a debian iso, or clone some random repository on github, then there has been concern that the author of that code will be financially liable for any errors in the software. That would be very, very bad. Early versions of the law seem to explicitly say that it would be the case. More recent versions seem like they might have an exception so long as there is absolutely no money changing hands. It's unclear what would happen in cases where open source software accepts donations. It could still end up being harmful to individual developers and to open source software in general. It's hard to say.
Which would in turn be very bad for society.
What I was trying to communicate here is that I think meaningful negative impact to free software and to developers is a worst-case scenario and not the most likely scenario. It's plausible, and we should be concerned, but I think there's also a plausible outcome that is neutral or positive for free software if companies end up contributing more to free software as a way of ensuring they are meeting their obligations under the law.