It has a few clauses and language in there that generally scare corporate lawyers. There are two main groups of people advocating the use of this license.
1) companies that sell non oss commercial licenses for their AGPLed software that they own the copyright to and want you to buy those. A lot of those companies are now starting to prefer shared source type licenses.
2) open source advocates that don't like any commercial usage of their software and will actively want to prevent any form of intermingling of closed source and open source components like is common in many commercial projects. This is nominally to protect their freedom. But of course it has consequences in the context of commercial projects that don't want to opensource their proprietary stuff. Whether that is actually true or not for any particular use requires a bit of careful legal scrutiny.
Some places that do license audits (e.g. most banks, insurers, and other large companies that need to be alert to potential legal pitfals) would probably flag anything under this license. Three reasons for this: these licenses are only fine under very specific circumstances and certain combinations of licenses are not compatible. And finally of course these audits and lawyers are expensive. So, the easiest way to stay safe would be a blanket ban on anything with this license. Which is my general attitude towards this license.
Anyway, don't take your advice from random commenters (including me) on hacker news and consult a lawyer when in doubt. Yes that costs money. Alternatively, save some money and just steer clear of this mess.
AGPL is fine for open source projects. It isn’t really useful for a commercial closed-source or even an open-core codebase in some cases.
On the other hand, usually that’s the intention when a project selects AGPL. There’s usually a commercial license you can buy instead (see iText for example).
It isn't fine because it will come up in due diligence as a risk, every single time. It's easy to say "it's fine", and in theory I agree with you. But it's a cost that doesn't make sense if you know what the auditors are going to say and expect. Auditors flag even more benign things than the AGPL, but to pretend it's not a thing is just whimsy.
