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Social democracy is still capitalism, and thus incompatible with leftist philosophy.

No, social democracy is absolutely a leftist ideology, it just asserts that socialism can be achieved gradually, using capitalism to improve things in the near-term.

Socialism is specifically something only a whole society can perform.

Sure, but a company can represent a "society" in the small. A "society" is just a group of interdependent individuals. I think a company certainly can count.

I don't see that as "word games," it's simply looking at definitions we all use. Unless using dictionaries is somehow "playing word games."

Yes, capitalism can use things made by socialists. So what?

But FOSS was not made by socialists. Stallman was arguably the creator of FOSS (at least copyleft), and AFAICT, he's not a socialist. The core intent was to enable end-users to modify software for products they've bought and to share those modifications with other users, not to democratize the means of production. It has more to do with Right to Repair than social ownership of anything. In fact, it reinforces individual ownership of their IP and empowers them to share certain rights with others. There are a lot of different FOSS licenses for everything from the extremely liberal (MIT and BSD licenses) to very restrictive (AGPL and GPL v3). But none of them grant copyright to any entity other than the original author.

If FOSS was socialist, it would require FOSS projects to be democratically managed. But they explicitly make no statements to how projects should be run. But FOSS licenses absolutely do not do that, the intent has always been on ensuring the code can still be used and modified even if the original creators are no longer interested. That's not socialism, it's just the digital equivalent of laws that exist elsewhere to protect users' rights to tinker with products they've bought. So your right to make parts for your car and share those parts with others doesn't mean car repair is socialist, it just means you aren't prevented from making those changes. The same goes for FOSS, your right to make changes to software you've received and distribute those changes doesn't mean you have ownership of the software itself, it just means you've been granted certain rights.