Well, I dont know if it was the case, but I think there are many rumors that was blown up by some people who actually dont know the real problem. I think you need to check the validity of the information that you bring on your post. It also happen in Indonesia where even a respected national newspaper can say something false about the project, something that I see is made by blind Jokowi follower who support what ever decision he made. Many Indonesian Youtube video about KFX are also made with misleading fact to back up government initiative to renegotiate the program. As some one who follow KFX/IFX program since South Korea offer the proposal in 2009 to Indonesia and read many news about it until now, I can really see which claim is false and which claim that is true.
Source Code and Development
I dont know detail of the agreement but I read somewhere that Indonesia can independently upgrade the aircraft. It is one of the thing that make Indonesia feel the program as worth it to pursuit. If not said by Indonesia head KFX program, it was said by our Aerospace Company CEO himself.
And I also read somewhere that Indonesia can develop the aircraft independently after the first block is finished. I think it is like how Airbus Defense can develop CN 235 into C 925 by himself and PT Dirgantara Indonesia develop CN 235 into N245 by himself. As we know, CN 235 is made by both CASA (that later join Airbus) and PT Dirgantara Indonesia (PTDI).
Well, something that is quite clear is that even though PTDI have designed several planes like CN 235 (together with CASA), N 250, N2130 (unfinished), and N 219, but all of them are transport aircraft. Even though our engineers in PTDI has said that if some one can design a transport aircraft it means hes/she can also design a fighter jet since all plane design use similar basic knowledge, but we have to agree that Indonesia hasnt got any experience yet in designing a fighter jet. While South Korea has designed KT 1 Wongbie and T 50 advance jet trainer with Lockheed Martin help. It means both parties are actually in quite similar capability in designing a plane.
So why Indonesia accept South Korea offer ?
We need to have a jet fighter project that can improve our designers capability while in the same time we understand that our financial capability is not enough to make us develop it alone. And since no Western countries with good capability in designing a jet fighter ever offer us to conduct a join program to build a fighter jet, we accept South Korea offer.
With relatively similar knowledge in designing it also means we are trully developing and researching the fighter together, not just following senior partner that maybe is in the case in joint STEALTH fighter program between Russia and India (SU 57) that make India disappointed and get out from it. It is also why we also bring our lawyers to secure our IP right during the first research period (technology development phase).
Of course Indonesia is not interested to join KFX program just as a part producer since we have already designed and produced airplane parts since 1954 (Sikumbang/COIN anti guerilla aircraft) and continues with the creation of PTDI in 1976 where we design and also produce many aircraft like CN 235/C 212/N250/N219/Airbus parts/Boeing parts /Helicopters and also F 16 wings in late 1980s until the beginning of 1990's.
https://en.wikipedia.org/wiki/LIPNUR_Sikumbang
Avionics
Actually Indonesia can use its own avionics for its KFX version and it is why we also design program to produce many avionics for our IFX version. If we are not allowed to do that and must accept what ever South Korea has decided with its KFX version, there will be no such program exist.
So actually we use KFX/IFX program as the basis to develop many important jet fighter components. It is a long term project for us. Despite so, I believe we will still use KFX version for our IFX until the domestic component we are developing is approved by our military. We have companies like LEN Industry and InfoGlobal that can provide avionics component for our IFX version. InfoGlobal even has showcase its cockpit version for IFX in Indodefense event several years ago.