What is the distinction?

Open Source fullfills the open source definition: https://opensource.org/osd-annotated. Source available is software where you can look at the source, but do not have the rights you have with Open Source.

Free software follows a philosophy of “all people have a right to use computing knowledge” which has a very similar set of license scenarios but a different underlying driving culture:

https://www.gnu.org/philosophy/free-sw.en.html

The “stricter requirements” piece is that the freedom bent sometimes leads towards more restrictive licenses (like GPL)