This is going to sound crazy, but, at the time, they were spooked by Neal Stephenson's June 2019 book The Fall -- where the internet was broken by the open-source release of something akin to a language model that generated endless quantities of spam. They thought that GPT-2 might be that invention, so it worried them.

Then, a few years later, they learned that Google and Anthropic were planning on releasing LLM chatbots to the public, so they hastily launched GPT-3.5-based ChatGPT as a "dev preview" to get ahead of them. Their original plan was to finish training GPT-4 before launching anything.

Commercial considerations -- and public glory -- triumphed in the end.