> It is very likely to depend on jurisdiction, and may well need a court case to clarify.
Is it any wonder that developors don't understand licensing very well when this is the response to majority of their licensing questions?
How could you be anything except confused and uncertain?
The solution is to stick to well known and well understood licences and not tinker with them.
They could just use the MIT license, or GPL of whatever they like. Using MIT and then modifying it in the README is the problem.
This is only the response to the majority of (or even very many) questions if you decide to use a DIY license.