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What I'm getting at is that the compiled scripts can be disassembled back into LSL code if someone writes a disassembler.

When a simulator needs to run a script it gets the asset. The asset being compiled LSL code. The LSL source code remains as a separate asset in the asset server and can only be retrieved if the current owner has modify permissions.

If you have a simulator of your own, and you have modified the simulator's code to dump the compiled script asset to a file, you can potentially disassemble that file using a specially-made disassembler outside of this system.

This assumes that the open sourcing of the simulator involves handing it over to you so that you can run it on your own hardware that is completely under your control.

This does not imply that people can just open scripts up whenever they see one.