Meh. Seemed like boilerplate ass covering to me, take suitable precautions yourself and I see no reason not to enter. Especially if other indies are taking a backseat on this one.
To cover both sides this is the kind of format of comp I would like to see: just submit some ideas and the team background (no business plan and demo not needed) and the 10 best get funded 10k each to the point of rapid prototype (if you don’t deliver repay the money and ip remains yours), then cull to 3. If any of the culled 7 get offered a deal or sales exceed 50k then the 10k gets repaid for use next year. The 3 that remain get another 50k each were if development fails the ip is then owned by the sponsor plus any unspent money is returned. If development completes and they want to publish you get 30% of sales. Don’t like that then it costs 150k to get out of the contact. Business is Business!