For example, if someone were to make a heavily modified [or even lightly modified] version of irrlicht and wanted to release that - would they have to release under zlib or could they release under another license like GPLv3?..Permission is granted to anyone to use this software for any purpose,
including commercial applications, and to alter it and redistribute it
freely, subject to the following restrictions...
What does "redistribute it freely" even mean? That's the most vague thing I've ever seen in a license.