It depends where you draw the line of what is GrapheneOS. Everything they do is free and open-source. If you build it for emulator or Waydroid, it would indeed be FOSS: no proprietary blobs in sight unless you count your host's GPU firmware to taint the whole thing. The build scripts to dump your firmware blobs from your own device, building GrapheneOS, bunding it all back together, sign the build and flash it on your device, all open-source.

The only part where blobs are involved is the downloadable prebuilts which does include the blobs otherwise it wouldn't boot at all. They're not including blobs in their project. They're including the blobs that are already on your device and also downloadable from Google. It's not like they made their own proprietary blobs they hide the source for.

The GNU guys say that's unacceptable as any proprietary software is unacceptable, therefore the whole thing is tainted and worthless. They think the same thing of coreboot/libreboot.

In my opinion, GrepheneOS is fine. It's the best that can be done, and their project in itself is FOSS, even if running it on actual hardware requires a few blobs to be added, and it allows users to opt-in to installing a sandboxed Google package. The same I call Linux FOSS even if it can upload a firmware to my GPU so amdgpu works. At least the entire loading of the firmware is in my control, and I can verify that the blob being uploaded is the one I expect, even if the blob is proprietary.

Nothing that you replace with GrapheneOS is proprietary. The blobs are a no-op. Running sandboxed proprietary code is better. It's a net positive and reclaims some of your freedoms by being able to control and monitor the sandbox.