The point is, saying "we need to embrace linux phones" is silly. Android uses the Linux kernel, therefore it is a Linux phone. I know that's not the point of saying "Linux phone" but the line should be drawn better. Ideally, the Linux kernel should be completely discarded for a better kernel, but if the OS can still run "Linux apps" or "Linux desktops" under that new kernel, people will still probably call it a Linux phone.
Android being owned by Google doesn't really do much. It is very unlikely Google would close source the project, because any company making an "android phone" needs to modify android for their own stuff. Many features in popular android phones don't exist upstream, and require modifying android itself. Even if Google closed AOSP, that doesn't stop the community from working from the last release and moving forward.