It prevents the "original" author from making those versions unless he or she requests a transfer of copyright for any outside code. If you have evidence of the second claim, I'd love to see it or see a link. (I mean this as non-confrontationally as possible; I don't have an opinion one way or the other on whether it's true, but now I'm curious.)
The standard example of this practice is MySQL. If you want some more, Google for "open core". Warning: you'll probably run into many heated arguments.
