Ask HN: Derivative product license that forbids use of FOSS version?

My team is using an Apache 2.0-licensed FOSS project in one of our products. We've recently learned that a different division of our very large company has purchased a commercial license for a product which is a derivative of the same underlying Apache 2.0 FOSS project that we're using. We're being told that we must stop using the FOSS project because our company got a discount on said commercial license by agreeing to cease all use of the FOSS version.

Had anyone encountered this before? Is this a common practice? The scenario seems bizarre to me and I'm surprised that it's allowed.