People saying wrong things about the AGPL isn't an AGPL problem, it's an issue of people saying wrong things.

AGPL allows competition. Any free software license does. It's rule 0 of free software.

> it's chosen to to be a non-compete.

Well, too bad for them, because I can still fork this AGPL software and compete. So what's the issue?

The issue would be for contributors contributing for to this code under CLA seeing their contributions closed up. If that's not your thing, don't contribute to software under such CLA. I avoid it myself.