At the very least, even with that sterile definition, embracing the spirit would mean making all the software you're distributing FOSS. Instead, Google has been doing all kinds of bundle deals and whatnot to ensure that most distributions of their FOSS software come with their proprietary parts.

However, going further in embracing the spirit, particularly the "free software" part of FOSS is idealistic. It doesn't just fulfill that definition to fulfill that definition. Rather, it sees that definition as the baseline, to help ensure that the freedom of users is respected.

AOSP, despite being under an appropriate license, does not respect that freedom.
For example, many users would want their keyboard app (which has access to their typed passwords) to not have internet access. AOSP has a myriad of permissions, but not for internet access, since Google wants their ads to be displayed.

In theory, the license ensures that AOSP can be forked, and Custom ROMs do soft-fork it (i.e. make slight amendments to what Google puts out), but due to how much development Google puts into Android rather than there being a development community, it's effectively not viable for anyone to truly hard-fork AOSP (i.e. take it into a new direction, independent from Google).