Rather, being _embedded_ into a closed-source project, making a closed-source derivative work.

You can of course compose your system of closed-source and GPL'd parts, as long as GPL'd parts are separate, and remain open.

Well, both really. Even with open source, if I want to license my code under whatever license for whatever reason, I can't use GPL code.

And I'm not arguing for people to not use GPL. All I'm saying is there are valid reasons to use MIT (or whatever) if ones goal is to make their project as usable as possible.