That seems like a false-dichotomy between two extremes when there's all sorts of space in the middle... It's also assuming developer-to-developer tools would have the same rules and exposure as in service-to-consumer.

If I sell a physical motor (let alone plans for one) I'll have some liability for things like it Not Exploding. If someone buys a dozen of those motors to assemble a tragically unsafe "rollercoaster" of their own design and construction, I'm almost certainly not responsible for any terrifying decapitations.

In other words, most of the world already does not rely on the issuance of "Get Out Of Infinite Liability Free" cards.

Would that be software used in a product? I don't think that would qualify?

Ensuring Meta is responsible for its products would not need to assign liability to someone offering open source software.