Sponsorships are generally acknowledged with quid-pro-quo advertising opportunities - otherwise they'd be called silent donations.
In the case of tech conferences like the inciting incident, that means your logo everywhere, maybe an ad spot in between talks, and booth space. You might get some intangible reputational benefits from whatever other sponsors are present if they are viewed as highly prestigious or respected. Might even have opportunities to do a talk by one of your employees, we've all been to conferences where a vendor conspicuously also has a talk that coincidentally features their products heavily. All in all, it can elevate your perceived legitimacy in various ways.
Advertising might get you more business or more applicants and thereby grow your reach and success.
In terms of my personal values I'm a pacifist. I don't want to see something I like(d), something I made modest code contributions to, used to advertise for a commercial military organization that manufactures equipment for violence. It's the same way a vegan probably doesn't want to see advertisements by the beef farming industry or that someone who cares about renewable energy and sustainability doesn't want to see sponsorship by someone whose holdings are a huge stake in coal mining and fossil-fuel power plants.
In the case of the inciting incident, it wasn't a case of massive dollar amounts, it was ~$5k USD and it wouldn't have jeopardized the conference at all to say no thank you.
Yeah, it makes sense if you're a pure pacifist, the "all violence is wrong" -type.
I'm more of a pragmatic pacifist myself, which allows or even carefully supports violence for suppressing violence. I believe the USAF is generally speaking aligned with me on that. Which is why I'm not unhappy when they work with FOSS.
I think the opposite of pragmatic pacifism is the military-industrial market. The expansion and brinkmanship of weapons development brings out the absolute worst qualities in privately owned businesses. If you think lock-in is bad when it's your phone or email account, imagine how horny investors get suggesting DRM for hand grenades. This escalates because the goal of defense companies isn't to defend America, but to make as much money as they can get away with.
I'd like to think that I'm pragmatic as well, which is why I won't deny that NixOS would likely get used in conflict with or without event sponsor deals promoting it. However, if your in-person events pivot from a technically-focused gathering of like-minded individuals to a war council bankrolled by Anduril, I'd expect most attendees to be angry. Especially once you consider that the United States sponsors the export of weapons to countries that don't use violence for justifiable or proportional causes.
Yet you can be on the internet and make things a bit better by rejecting military sponsorship/influence in things you're involved in today.