A Free Software Island is a project, usually enabled by a foundation, where everyone agrees the software is created purely for the public good. Individuals and businesses alike agree to co-operate with each other on the software that is contained on the island, for mutual benefit.
Projects like Envoy were free software islands even before they joined a foundation (the CNCF in this case).
If the project will have many collaborators, often large insitutional ones, then a free software island may be the best home for it. While being on a free software island does not guarantee this kind of collaboration, it is designed for it.
Often, there is no direct monetization of the projects allowed at all. The Apache Foundation, for example, is very clear on this.
Instead, there are often downstream monetization of the software. For example:
Yes. The only risks in this model are that it only affirms the rights of the community within the island itself - it may result in the creation of more proprietary software, outside the community’s sphere of influence.