The question is why the term "Open Source" was coined when "Free Software" was already there. You can refer https://opensource.org/history for the answer.

The conferees believed the pragmatic, business-case grounds that had motivated Netscape to release their code illustrated a valuable way to engage with potential software users and developers, and convince them to create and improve source code by participating in an engaged community. The conferees also believed that it would be useful to have a single label that identified this approach and distinguished it from the philosophically- and politically-focused label “free software.” Brainstorming for this new label eventually converged on the term “open source”, originally suggested by Christine Peterson.

In short, Open Source is more about business than user's freedom. They didn't want the philosophical and political baggage that comes with the term Free Software but at the same time want all practical benefits that comes with it.

Apart from this, people also confuse Free Software as "copyleft" licensed software and Open Source as software with "permissive" license which aren't true. Almost all Open Source software are also Free Software, there are only a few exceptions.

Similar to the political differnece between the terms Free Software vs Open Source, I also see a political issue in using the term "permissive license" instead of "non-protective license". Non-protective licenses don't protect what "protective" (copyleft) licenses protect, user freedom.

As an ending note, I want to emphasise that I don't encourage splitting the communities in the name of political and philosophical differences. While I believe it's good to understand the hidden meanings and motivations behind using different terms, it's more important to work together for the common good. Whether you prefer Open Source over Free Software or Permissive over Non-protective, if you value people and freedom over profit, we should stand together.