Ironically the people most likely to care (open source developers) will likely have no rights at all to stop anyone using the software, due to the unrestrictive licensing

Look into the recent situation around Chef.

While it is true that OSS devs can't really take back their source code (though there are some legal exceptions at play here), they can still do a lot of damage.

Additionally, the situation is likely increase the popularity of "Open minus Hitler" licenses. Though many of them still serve primarily to scare off (corporate) lawyers than actually withstand a legal challenge.

Not that China would even listen or allow anyone to withdraw their software, even if it was closed source, commercial, and they still had their rights. China would just keep using it regardless and modify it to remove any restrictions.

... China isn't really the problem here for many. It's various US government agencies.