Well. I haven't seen the contracts or agreements between the two companies as it hasn't been tested in court... But CryEngine V does have a "Pay what you want" licensing model with full access to the source.
And one must assume by providing full access to the engine source code you would be free to make alterations to your hearts content, whether Crytek has amended those licensing changes for older versions of the engine, I honestly don't know.
But morally they should.

However... The crux of the issue is that... Crytek really shouldn't have a foot in the door in regards to this issue.
StarCitizen isn't using CryEngine, it is using Amazon's Lumberyard, which is a fork of CryEngine... And thus Cloud Imperium Games contractual licensing obligations is no longer tied to Crytek, it is tied to Amazon... But we will have to wait and see what the legal due process turns up I guess.
https://en.wikipedia.org/wiki/Amazon_Lumberyard

With that... I see StarCitizen as a project that is supported and funded by the PC community... And as such I don't really wish to see litigating companies that are in decline erode that funding to provide something that PC gamers have been clamoring for, for years.

I would like for all the funding that PC gamers have provided be used for making that game, rather than handed over to lawyers... Because that does us, the consumer no good what-so-ever.
Also... This may turn off other companies from using CryEngine as well, who wants to license a game engine when the license holder may start litigating against you, rather than work with you? Will Crytek start legal proceeding against Amazon next?

Also. You bet I am interested in the game. ;) I haven't bought any of the shenanigans like space ships or other rubbish, but I will buy the base game when it releases.

Full access to the source is different than open source. So no, they aren't allowed to do what they please. At least from what I know, but sure they may have a contract that allow they to do what they want without even crediting then.

And since we don't have access to any of the legal documentation to put all burden on crytek and consider they pricks is the morally wrong, unless of course innocent until proven guilty isn't something you value.

So you think it's wrong for Crytek to look for its right because PC community is paying for the game? Well all games are paid by customers in some way, so should we stop any litigation and allow people to breach every contract they want? And off course, is it morally wrong for Crytek to sue, but it's ok for the devs to nick and dime from customers to a point of charging 800 pounds for a vessel?

What doesn't do good for customers is companies breaching contracts and laws as well. It's their responsibility to uphold it.

Have you been privy of any negotiation Crytek have done in the past with this company to try and resolve it out of court? Because it's quite probable they tried several times without success... but here we are at one of those "villain publisher x poor dev" situation.

It's funny to be interested in the game and the way it's funded, but to attack one company because you are interested in the other without really having any information to make that judgment isn't really fair at all, and that comes from someone that have zero love for Crytek and is interested in seeing what this game will turn up after all this hype.

I don't think we've played the same game, cause for me it's one of the best FPS games ever made - and I played it several times on hardest exactly because of great AI and level design.

Enemies always try to outflank you and on higher difficulties they actively shoot in general direction of foliage you were last spotted in trying to flash you out.

As for level design, I find them really good with almost all of them being quite wide with different paths you can take....you sure you've played original PC version and not cutdown console port back in days?

lol what console ports, the time it came out (2003 or 2004?) no console was capable of running something like that. I think I upgraded my video card to play it. Everyone was amazed by the realism of tropical island, in game magazines all they did was talk about how great the jungle and the water was, but the game itself was poor. Same thing happened in 1998 with Unreal.

Well. Yes and no.
If you open your engine and base source up, then one must assume you have a ton of leeway of what you are allowed to do in there.
OIpen source also doesn't allow you to do 100% of what you want either, it does actually have restrictions on it's use.

I mean. Amazon essentially made it their own fork of CryEngine, but their agreement may have been different.

This is also correct. We aren't privy to any legal documentation.
But to say we cannot put the burden on Crytek is a little disingenuous, Cloud Imperium Games isn't using CryEngine, they have licensed the engine from Amazon.
That means they do not have to adhere to any of Cryteks legalities outlined for it's CryEngine license.

Wrong? No. Morally grey? Most certainly.

I am all for litigation if your intellectual property is at some kind of risk or abuse, but that isn't what is happening here.

I entirely agree.

But again... Cloud Imperium Games, engine contract lays with Amazon not Crytek.

No I haven't. I am privy to statements that Cloud Imperium Games has made in regards to engine use though as are you.
Here is their statement on the use of Amazons Lumberyard Game Engine from a year ago.
https://venturebeat.com/2016/12/23/star-citizen-and-squadron-42-are-using-amazons-lumberyard-game-engine/

I haven't actually made an investment in StarCitizen. I don't actually agree with it's excessive methods of revenue raising, I understand why it's done though... And I think it's the game that had to happen and had to be made to push technology and to show what crowdfunding can/can't do.

Now don't get me wrong, I used to adore Crytek, back when they were champions of the PC and was even a moderator on the most popular Crysis forum.  (That got sold off, I think merged with the official Crysis forums, I left a bit before that.)
But they aren't the same company that they used to be in my eyes, so it's no secret that I am no longer a fan of theirs.

I do hope however that they can turn their company around and go back to what truly made them great as having Crytek go bust is also not a good thing for the gaming industry or the consumer.

I will never understand the hype for this development hell of a game.

I'm waiting for the sequel to Lineage 1 because I already know what Lineage stands for, unlike this game which is kinda blurry right now.

it's still using cryteks codes. not sure what the agreement is with CryEngine and Amazon though.

But in case the one breaching contract is Amazon by selling the license of their engine based on CryEngine3 then they should sue Amazon... we'll have to wait for more data.

Doing some digging. Apparently Cloud Imperium games did an outright purchase of the engine and source code last year in the event that they would be covered if Crytek did go bankrupt. (As that was becoming a real possibility at the time.)

http://gameranx.com/updates/id/22782/article/star-citizen-dev-responds-to-crytek-going-under-fears/

Which means that, not only did Cloud Imperium Games own the complete rights to CryEngine, the source and it's use, but it should have negated any and all prior contracts as a new contract superseded the old one.
Then we have the fact they aren't using that fork of the CryEngine now anyway, they have instead licensed it from Amazon.

You put as much of the burden on them as they deserve. No more and no less.

Doesn't matter.

Amazon licensed/bought the engine from Crytek and turned it into it's own game engine dubbed "Lumberjack". - That is what Cloud Imperium Games is using as a base for StarCitizen.

Unless of course Amazon has the license to issue licenses for other party's to freely license it's licensed engine.