That's a grey area surely. Much of Valve's output has been people making completely new own games out of existing games - CS, TF2 and Dota all began life as mod

That's a grey area surely. Much of Valve's output has been people making completely new own games out of existing games - CS, TF2 and Dota all began life as mods to very different games. I think that they'll have monetisation in place either through royalties like Epic, or just their cut of Steam sales. I don't see why they'd worry that someone used Source to make a brand new game they're almost sure to profit from anyways.