It doesn't make sense to me how you could make the source code "non commercial" but some how allow commercial use of binaries.

Are you saying that if you sell the software you don't need to provide customers with the source code?
Or perhaps that a commercial company is never allowed to look at the public source code?
Both of these seem like bad ideas to me.

EDIT: Perhaps you mean that binaries can be sold, but you can't charge money for source code?

How would this apply to companies like Red Hat or Canonical?

Like Aseprite business model, Anyone can views 'How commercial software works'. Early access freely available source code if you don't want pay, but it has 'No warranty'-ish disclaimer. That's like MS Windows insider program.

@cam900 What are you paying for in that scenario?

@cam900 What are you paying for in that scenario?

Mainly for allow long-term warranty services.