Not a big problem. Depending on the license you cannot include open sourced code in commercial projects, but the other way is fine. It would just mean that they cannot release the whole sources but only a part of it. Regarding the isolation, they likely have it isolated already. Basically they will have a project consisting of their own source code with some external libraries as dependencies. These libraries might be commercial, but nothing is really holding them back releasing their core code as open source, except them not wanting it. I really guess that their not making Galaxy open source is just because of their will to not do so, whatever the reason.

Well... the GPL is more picky about mixing open and closed source, but they can pick another, more permissive, license. And maybe the source code is not as neat as we hope it to be. At least I have read many complains about the inner workings of the website.
In the end, where there is a will, the is a way.

GPL binds you, not the copyright holder. So if they are in a position to pick a license, then they are also in a position to license their code under GPL.

Yes, it is true what you say. GOG could release a GPL version and a closed-source version (AKA dual-license).
But in that case GOG may be unable to mix in the contributions made by the community because those would then be GPL-only code.

Wouldn't they just have a boilerplate that says by submitting a pull request you licence/transfer the code to them. Sure someone might release a change under gpl and refuse to transfer the rights putting it out of GOGs reach but I would imagine that most folks that have an interest in GOG are willing to put up with it.

Cloud saves and network play aren't part of the client; they're network services, to which the client is merely an interface. Open|closed source doesn't apply to a network service, since it's just a data exchange.
What opening Galaxy's source would implicitly do is open the protocol spec to Galaxy network services -- which GOG clearly doesn't want to do (still, why not?).

So, AFAIK, network features like cloud saves have nothing to do with licensing considerations for a client.

...because it'd enable anyone to use what GOG commissioned and paid money for, including mammoths like Steam and shit-eaters like Epic who last I heard still don't have a fucking cart.

The opposite - it makes the official release more secure. The risk is borne by individual users who use experimental forks, but they should only compromise their own data.

As a commie and a pirate, I agree with you in this specific case. It's not selling copies, it's scarce commissioned labor.

It's not like Steam or Epic can use GOG's network services for their own stores. Perhaps I misspoke. A protocol is merely a definition for communication. It doesn't say how a client|server should work, just how they should communicate. Anyone could make a client, since the role here is simple; but no-one can replicate GOG's network services without having the source code (for the server) and their databases -- which there would be zero reason for GOG to give out. I'm not saying GOG should open-source their server code; there's no reason for them to do that -- and they don't want anyone else to be able to host GOG. What I'm saying they should do, is provide -- or at least allow (i.e. open or restricted protocol) -- an open source client.

I'm no business expert, but I just can't think of a compelling reason not to make Galaxy open source. They don't charge money for it; furthermore it's optional. They don't have DRM (the main reason for a proprietary client like Steam). Fueling competition: I don't think it would, especially if they used a restrictive license like GPL. The benefit to GOG is they get goodwill and free labor from contributing members of the community.

As a FOSS fanatic: it's not that I think making money off software is wrong; not at all. But rather that I have a dream of a digital world of collaboration, instead of competition -- where all can contribute and benefit freely.
I respect someone's wish to be compensated for the time/work they put into developing some software. And I have no problem with them asking those who use it to contribute monetarily.