[Legal] Firefox not truly Free?

[William Ballard <nospam_50301@alltel.net>]

I don't know what to make of this statement:

http://news.zdnet.co.uk/0,39020330,39189475,00.htm
[quote]
The main disadvantage of the deal with Google is that native language 
versions of Firefox are not permitted to change the default search 
engine to one that is more useful for searching Web pages in a 
particular language.[/quote]

I don't want to be a chicken little, but in what sense is this statement 
valid?  It seems to have extraordinary implications, not in the least 
that Firefox and Mozilla would have to be considered Non-Free.

Is it merely advistory or a request?  I know there was some talk about 
Debian Thunderbird; here's some more fuel for the fire!

What gives?

[If this gets moved to d-l@l.d.o, cc me, b/c I'm not on that list.)