Having only used VSTs but never even looked into how they're actually built - what does this now mean in simple terms? Did you need a specific closed source framework to build them or something like that? What has changed now?

You had to accept some license terms before you could download the VST SDK. When linux audio started to get "serious" 20 years ago, it was a commonly discussed pain point.

Concretely, it made distributing OSS VST plugins a pain. Especially for Linux which generally will want to build their packages.

Note that his was the VST2 era. VST3 was commercial license or GPL 3, which was an improvement, but only slightly, because it excluded open-source software released under the GPL 2, and also MIT/BSD/whatever-licensed software couldn't use it (without effectively turning the whole software into GPL-licensed software).