There is so much customizability for free software that allows a user to create ODF documents. The fact that you can download the source alone greatly increases your ability to do your own thing, and yet the product itself allows you to create very rich documents, or read ones that others have made if you want. Have you spent time using these LO?
The bug discussion you cite is exactly the sort of situation that could take place in AOO as well. Your solution of separate teams won't fix your problems. Your best hope for good behavior overall is to get lots of good people working together where the collective wisdom and size gives you the resources to do the right thing. If programmers upset current users, angry emails and bug reports will come in. Sometimes it takes a while to add a feature, and yet do it in a way that doesn't upset people who are used to some aspect of the old behavior. But it will usually get there.
I again repeat that comparing LO to spaghetti sauce is dangerously wrong. Malcom Gladwell isn't incorrect, only those who try to compare it to a reason for the OO / LO fork. It is scary that someone important would make this comparison.