Generally good open source projects will have contribution guidelines, so people aren't just "running around doing whatever they want", and obviously there are maintainers to reject pull requests that break things and only accept the 'good' changes. I'm not entirely sure you fully understand the open source process & workflow.
My concern isn't with credit, but rather with accountability. I'm fine working on an open source project, because I know someone's not going to run off with my work and do whatever they want with it (ie. sell it). Open source projects will typically have a good license in place (GPL is a good start) to ensure that doesn't happen. If I'm doing unpaid work for a closed source project with no such assurances in place, how do I know I can trust the people leading it? What happens when the current developers all give up or disappear (as is the case with Tamriel Online)? With open source, I know that my work isn't going to waste, but rather continues to benefit the community as someone else can pick it up if (or when, if history is to tell) that situation arises. I'm not wasting my time working on something that'll die in a few months and go nowhere. Or maybe people aren't happy with the current project's leadership or the direction it's going in--people can fork it and develop something better suited to their needs. Or is this what you're worried about?
It's funny that you claim I'm worried about credit, as it seems that's more your concern than mine. What are the downsides to open sourcing this? 'Yamashi' doesn't get his credit for 'stolen' work? Is that really it? Seems rather childish to me. Not really encouraging me to want to work on this project if drama is impacting major practical decisions like this.
The benefits should far outweigh that simple matter of pride. I'm personally not bothering with this because of the whole "application" process; I just want to code, not waste my time with applications, drama, and bureaucracy. I can't even count the number of open source projects I've contributed to over the years because it's just so damn simple. "Oh look, I found a bug": I fork it, fix it, and submit a pull request back in. Quick and easy. No committal required. Everyone benefits.
This seems like a cool project, but with no assurances or accountability I don't see why I should spend my time on this? Not only does open sourcing make it easier for other programmers to contribute, it means the community's changes of actually getting something in the end are much higher--rather than the project dieing in a few months just like every other attempt at this, and the next one having to start from scratch again. Good management should learn from others' mistakes, not perpetuate them. If you're made up your mind, that's cool. I respect that. You're entitled to your own decisions. But I'm positive I'm not the only programmer (or end-user) who is inclined to think this way. Either way, I've said my piece. Don't misinterpret me: I wish you the best of luck moving forwards. If this actually gets somewhere, you're fully entitled to an "I told you so".