"You just do not get source code."
In fact, you do. I wrote the sales and they said the sdk for the freeware is the one for indie.

I just took a look at the demo last night. They have quite a few very nice features in this engine. They have realtime mirrors, I could watch my character move about on a tv screen, a lightball that you could move around (light moves), some good normal and bumpmapping, fire a gun over the water and it splashes, watching two factions go to war, good physics.

They are going to be working on putting in static lighting and automatic grass.

I agree, lighting is very much what is needed for this engine to make much better level design.