They've given out Source 2 to others AFAIK.

To who? It seemed like Source 2 licensing wasn't really on their radar.

https://vghe.net/source-2-engine.html#source-2-engine-games shows Valve almost exclusively.

It was on their radar. There's an old slide deck where they talk about releasing source 2 for free akin to unreal. But they scrapped that idea and gave the code to facepunch/Garry instead, for s&box to fill that hole.

Yes, OK I worked on Source 1 game (external to Valve) and before I left I was told that it was going to be moving to Source 2. I guess it left me with the impression that it was going to happen - apparently not? I followed up and it turns out that game moved over to UE.

Which game out of curiosity?

Ah okay - I wasn't really paying any attention when Source 2 first came out but looking back now it hasn't been used for a whole lot of games.

I don't think this is correct, but happy to be proven wrong if you can find one.

Is sbox closed source ?

Yes it is. The C# side of it is growing and that is easy enough to decompile though, if you're just curious. That's custom to S&box though and not a part of Source 2.