Yeah, even Valve have (maybe surprisingly) chosen not to license the Source 2 engine.

That's technically not true – they've licensed it out to Facepunch to create a sequel to Garry's Mod (which was one of the most popular Source 1 games): https://sbox.facepunch.com/about/. It is the only one we are aware of though.

True yes - but Source 2 is now eight years old (and has been in development for probably 14 years) and has only been licensed once.

I won't be surprised if there are some other licensees eventually but it seems like Valve isn't overly interested in making the engine usable in the same way that Unreal, CryEngine, Frostbite etc are.

Probably because it's still incredibly buggy? That's my impression watching some of the videos posted to the counterstrike subreddit.

I don't think the engine itself is buggy, or at least not all parts. Source 2 has been used in Dota 2 since 2015 and they also shipped Half-Life Alyx using it in 2020; neither is consider particularly buggy.