There is no license as such. esxDOS is copyright Papya Design. The only reference to the permitted use of the copyright is "All rights perversed", which is typically included in permissive licenses. Typically it means the software is not public domain, but you can use it however you see fit so long as you don't blame the author.

I've been wondering what would be needed to be able to distribute physical copies of homebrew games made for ESXDOS, and I found there are two main problems:

1) ESXDOS version segmentation.
2) License

First problem makes people unable to create a bootable SD card, that you can just insert in your DivMMc and get it working out of the box, as you don't know which version of the files at SYS and BIN folders to add. I honestly don't know the reason behind that, but I wonder if there may be a set of SYS files that can be "wildcard sys files", so ESXDOS accepts them as valid, always. Otherwise, there may be an option to have some AUTOEXEC.BIN file in SYS folder, that if present, is loaded as ESXDOS.BIN temporarily (not flashed), in which case authors will just to make sure the usual ESXDOS.BIN file is bundle with the SYS and BIN foldes in the SD card, and just rename it AUTOEXEC.BIN

Second problem is that as far as I have found, it's unclear if ESXDOS can be bundled with a game.

Of course I understand first problem will persist even if a new version supporting some of the features I suggested is created, casue that would not change the current segmentation, but in the long term it may be a solution.