Linux Kernel GPL Licensing

That's sad. How does that work with the GPL license of the kernel?

Linux is GPLv2, so it would have been okay because of that I'm guessing.

Licensing. It's not GPL so is not considered suitable for inclusion in the linux kernel.

The issue isn't whether or not the code is open source / free software, it's specifically compatibility with the GNU GPL v2 under which the Linux kernel is released.The GPL is picky about what licenses are compatible with it (or more specifically, what licensing terms), and for very good reasons given its intended purpose (to promote the availability of yet more GPLd code).

Most probably not. Kernel devs are tame even with closed-source device and software vendors pirating the Linux kernel. I doubt any kernel copyright holder will bat an eye over GPLv3 vs. GPLv2. Not to mention the very relevant question of "is it really a derivative work?", which very much depends on the depth and complexity of integration, provided interfaces, GPLONLY symbols and other minutiae.

It's unfortunate that the kernel Linux is not GPLv3, either.

Users of GPL licensed software such as the Linux kernel, are bound by the terms of that license to release modifications under the same license. Android and AOSP incorporates and uses the Linux kernel; this is the entire reason AOSP exists. You cannot pick and choose which users you distribute sources to under the GPL.

Not quite. any part that links with kernel must be GPL. other parts may not be. See how NVIDIA/ATI do it for examples

It's not immaterial, it's literally the point of the GPL. If they don't want to release their modifications they shouldn't take advantage of the huge effort that went into the linux kernel. Maybe use a different OS and license it..

The Linux project has made it clear that apps running over it are not linking with it and therefore not derivatives for GPL (and AGPL) purposes. Releasing the source of your kernel is no problem at all.