"There's a very good chance that without it being open source it would have went precisely nowhere. "

Why? You say a lot of things, but none seem to related to why this is true. As far as i can tell, it is definitively not true.

The app developers were happy to go where there was money, and the users certainly didn't care.

Again, i'm a huge supporter of open source projects, i donate to the FSF, etc. I would love for it to be the case to say that Android was a success/failure because of open source. It's just i've seen exactly zero data that supports this notion, and a lot that doesn't.

The real history rewrite here is the rewrite that Android didn't enable choice or competition. Before Android all of the systems you're talking about had user interfaces that were tightly controlled by the carriers right down to the Verizon internet browser. Your best case scenario would be apple winning. Your worst case scenario is you still have Verizon deciding what your phone user interface should be like.

Android was developed via billions of dollars of investment by Google. Google has no obligation to provide a free OSS variant, other than for the parts that are GPL'ed.

If all Google is offering is the complete Android experience (including the App store and all the Google apps,) and not any OSS variant, how are manufacturers limited exactly ? They can either use Android, that is being offered to them for free, or roll their own OS.

This is true but is not relevant to the situation at hand and Google has very reasonable arguments for insisting on this. As far as I understand it, there is no requirement for a manufacturer to ship Google search or the Play Store on an Android device they manufacture. They only require that manufacturers not fragment the ecosystem by breaking compatibility. If you are going to build on the back of the ecosystem, don't break that same ecosystem, and that is quite reasonable. I am sure Microsoft would not tolerate OEMs licensing windows then modifying the Windows APIs on the installed system to break compatibility with apps made by Microsoft and 3rd parties. I am quite sure they would refuse to continue to license Windows to OEMs that did that.

The issue at hand is around what Google requires once somebody wants to license the Play Store. At that point they are required to also ship Google Search as the default which is the problem.