This license is found in several components in TeXLive, mostly in components originating from BibTeX.
The FSF's rationale regarding the LaTeX Project Public License 1.2 applies to this specific scenario: http://www.fsf.org/licensing/licenses/index_html#GPLIncompatibleLicenses
This license contains complex and annoying restrictions on how to publish a modified version, including one requirement that falls just barely on the good side of the line of what is acceptable: that any modified file must have a new name.
The reason this requirement is acceptable for LaTeX is that TeX has a facility to allow you to map file names, to specify “use file bar when file foo is requested”. With this facility, the requirement is merely annoying; without the facility, the same requirement would be a serious obstacle, and we would have to conclude it makes the program non-free.
Thus, this license (and its variants) are free but GPL incompatible, but only on TeX files. If this license were applied to unrelated code, it would almost certainly be non-free due to the renaming restriction.
Original License Text
% Copyright (C) 1985, all rights reserved. % Copying of this file is authorized only if either % (1) you make absolutely no changes to your copy, including name, or % (2) if you do make changes, you name it something other than % btxbst.doc, plain.bst, unsrt.bst, alpha.bst, and abbrv.bst. % This restriction helps ensure that all standard styles are identical. % The file btxbst.doc has the documentation for this style.
There are several variants of the Bibtex license which, while worded differently, evaluate to the same meaning.
%%% license = "Unlimited copying and redistribution of this %%% file are permitted as long as this file is %%% not modified. Modifications are permitted, %%% but only if the resulting file is not named %%% path.sty regardless of case",
%% This file may be modified for individual use. %% %% A modified version of this file may not be %% distributed under its original name.