ianal but I think it's done this way to allow for some latitude in interpretation. gives licensees the ability to get things going, eg as a private beta, and seek a commercial license when they're ready instead of worrying about that up-front. also gives both parties the ability to argue whether a particular situation counts as production use if the dispute ends up in court.

Maybe so, but it's a pretty weird license to point to if you want to make the case that we already have a good enough license and don't need more.