AlmaLinux's response to Red Hat's policy change

Because if they weren't, how could the GPL place conditions upon distributing binaries that you compiled yourself?

That's easy. As far as the GPL is concerned, the source code and the binary represent the same work. Since distributing the work is something that normally, as per copyright law, only the original copyright holder gets to do, the copyright holder – through the GPL – says that as a special gracious exception it's OK for you to distribute the work (in source or binary form) only under certain conditions, which are slightly different for binaries vs. source.

Once more, the object code cannot be a “derived work” of the source code, because works can only be produced by human authors. Monkeys don't qualify, and compilers certainly don't qualify. The thing about “translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation,” etc. is that in all of these a certain amount of creativity and original thought, by humans, is at play. In addition, as you quoted, “A work consisting of editorial revisions, annotations, elaborations, or other modifications which, as a whole, represent an original work of authorship, is a ‘derivative work.’” (emphasis mine) – but compilers do not create “original works of authorship”; instead they perform a mindless sequence of uncreative, predetermined steps in order to make the source code of the work executable on a computer. Even if you performed the same sequence of steps yourself, as a human, this would change nothing because the compilation steps are not “editorial” – there is no creativity or authorship involved. Hence there is no way in which the executable could be considered a “derivative work” of the source code because it fails the most basic tests of what makes something a “work”, plus it isn't “derivative” in the sense prescribed by copyright law.

That loophole doesn't exist for the GPL 3 year offer, because each entity in the chain is required to provide sources themselves; if Person A disappears, then Person B and Person C are still on the hook for the sources if they distribute a binary. regardless of its modification status.

And the reason it's a problem is that, per the terms of the licence as you've described them, neither Person B nor Person C have to distribute the modified source, even if they possess it, while Person A does have that obligation, but no longer exists for you to enforce against. Person B exists basically so that when you chase Person C for compliance, there's someone who can pass on the sources they got from Person A (but do not have to share) to a new Person D, who takes the place of Person A in the loophole. Rinse, wash, repeat - Person C never shuts down and never has the sources to the binary they pass on, and is running the long term business. Person B exists solely to put Person C in the position of always simply passing on an unmodified binary and never actually having the sources themselves. Person A gets replaced every time there's an attempt to enforce compliance, and the new Person A is seeded by Person B with the modified sources obtained by Person B from the previous Person A.

The result is that I have Person C, who exists long-term, and supports the business case, but who never even has the sources to the modified binary. Person A gets closed down whenever there's a chance that they'll be asked where the sources are, and Person B can honestly say that they're passing on an unmodified binary from Person A to Person C, who distributes it widely. The company that owns all of A, B and C has the sources, including modifications, but you have no practical way to get at those modifications, since the entity doing the modification (and hence with the obligation to publish) stops existing when you try to get the modified sources, and is replaced by a new entity in the shell game

This is why the GPL says that if you pass on a binary, you also acquire obligations to pass on the source code to the people you give the binary to - in the same scenario, Person C has an obligation to pass sources onto you, and thus the fact that Person A has vanished with the sources just puts Person C in a position where they can't distribute the binary at all (modified or not).