Why would they want to become the target for free users vibe coded slopware? I don’t think many of them are converting to paying customers.

They don't need to be.

GitHub is already the main platform for random open-source projects, and that's unlikely to change any time soon. GitLab's selling point is essentially "Github, but not by Github". They would do Just Fine offering a highly-restricted free account for the handful of hobbyists who care enough about leaving GH but don't care enough to go to Forgejo & friends and for the people doing evaluations, offering free credits to the few high-profile FLOSS projects who accidentally end up on GL-the-SaaS instead of self-hosted GL, and for the rest just focusing on paid corporate customers.

They could easily impose usage limits for such no cost users, which disable abusive usage.