Community distributions such as Debian, Gentoo or Ubuntu decided to use a hack to dynamically download the plugin in order to respect the license while trying to fulfil desire of their users.
Some others decided to contact Adobe directly, such as Warren Togami did before being hired by Red Hat to work on the Fedora Project in 2004. However, since the start of a more official support of Linux by Adobe, the FAQ has been changed to explain that custom agreement will only be done "on an extremely limited basis".
Yet, today the latest release candidate of Mandriva was announced by Eugeni Donodov on the official blog without much fanfare and the terse changelog did forget to mention an important change. Starting with 2011.0, the Flash plugin will be installed by default on all products, and be distributed as an integrated part of the system by the regular network of mirrors. It was previously offered only to paying customers as part of their commercial Powerpack offer.
However, the community seemed to realize the change only today and it triggered some reaction by a mirror admin concerned about his liability in case of copyright violation. Michael Scherer, a long time member of the community sent an email explaining that the situation was wrong according to his information, quoting past experiences with Adobe and the license on the website of the software giant.
As one of the leading members of the BSA, Adobe demonstrated with the Sklyarov case 10 years ago that they would take any breach of their copyright and intellectual properties very seriously, not fearing to bring the issue to US court. Neither Adobe nor Mandriva commented on the issue at the time of writing this news.