Do you say the same of Microsoft? Or Apple? They both have their own OS. Huawei has 114,000 employees in Research and Development. Microsoft has 77,000. Apple has 166,000 in TOTAL and do not disclose how many are in R&D.
Huawei used AOSP, and Linux as a foundation for earlier versions of Harmony OS, but have since switched over to an entirely bespoke HongMeng kernel.
I'd personally rather it be FOSS but I'm still glad to have any sort of competition in the OS space. It should be normalized that all programs should just have to compile themselves into different versions for all OSes. The more OSes other than Windows we have the more companies will want this. I think Unity game engine already does this where it gives you a Linux, Mac, and Windows executable by default.
But it being closed source makes sense for its usecase too. The Chinese Government want this to be used in government there, just like Windows is in the US, and so they want the code locked down.
If I had to choose what OS to use my order of which ones I'd prefer probably goes:
GNU/Linux
FreeBSD
HarmonyOS
MacOS
Windows
I think the most important thing is that people realize Huawei is not making some Linux distro. They're not a small or medium sized company. They're a peer to Apple and Microsoft. An absolute behemoth that can support their own entirely in house software stack+ hardware ecosystem. That's the real story here.