While I certainly support the idea of having an unencumbered commercial-quality 3D engine, I'm a bit skeptical. Coincidentally yesterday I just read
an article about Amazon's game division on Bloomberg which seems to indicate that Lumberyard is lacking massively compared to its competitors. There's a
video about this article on YT as well, it's where I got the reference myself.
Lumberyard is/was also open-source AND royalty-free and yet there are no indie games using it. Not having a single finished game out there while the engine is 5 years old isn't exactly a massive endorsement.
The cynic in me would say that Amazon is just off-loading its responsibilities on other companies. Also, where's the money going to come from? Are these companies going to keep paying for development without a return on investment? Is the Linux foundation up to the task? A 3D engine is a really specific type of software. Time will tell.
However, reading the details on that article kinda makes me excited as well (although marketing). A decent modular design? CMake as build system. (Unit) testing! Check, check, check.
If code quality is good along with good performance and if they can keep up the development pace I can see this growing into something interesting for the open source community.