installation of unpaid and unlicensed software is prohibited.

Who (allegedly) prohibits it? If it is an entity within your company, perhaps a more fruitful avenue would be to ask them to clarify their position on Free and Open Source Software, as the policy you were taught appears ambiguous. If the intent is to claim that it is prohibited by law, then the training material should be clarified, as it can be misunderstood to encompass Free and Open Source Software (installation of which is most certainly not prohibited by law).

Note that not all free software is Free and Open Source Software. Some products are free for personal use but require a license when used in business, government, etc. The trainers might have intended to indicate that it is your responsibility to be sure any software you install does not require a license to be used in the applicable context, even if it would be free for your personal use. Clarification would still be in order.

Notepad++ does have a license and it explains the software’s parameters for it’s use . . .

To be clear, the GPL is not an End User License Agreement. The convention of asking users to “accept” the GPL has no contractual force, according to the GPL’s own authors: https://www.gnu.org/licenses/gpl-faq.html#ClickThrough

If an IT department accepts that liability, they are free to allow the users of their system to use it, at their peril, not NPP’s.

This part is absolutely right. I would only add that nothing in the GPL prevents IT departments from developing their own “locked down” fork of Notepad++, or even a commercial version, provided they publish the source code.

As @PeterJones points out, Notepad++ does have a license and it explains the software’s parameters for it’s use. If an IT department accepts that liability, they are free to allow the users of their system to use it, at their peril, not NPP’s.

It is licensed, as license.txt tells you.

Having a paid version would require that Don would have to figure out tax liability for the paid licenses. I doubt he’d want to do that.

Having a paid version would imply a level of support that Don isn’t likely willing to personally give, as he leaves “support” for this free product up to us fellow-users of the product.

Having a paid version implies a level of liability that I doubt Don would want to take on.

Having a paid version would require Don to hire a lawyer to make sure that he wasn’t running afoul of any of the issues I brought up above, plus any issues that I wasn’t able to think of that a good lawyer could.

Having a paid version might give a foolish I.T. department a false sense of security, despite the fact that “paid” software isn’t any more inherently secure than free software. Whereas having free-and-open-source software allows anyone, including a wise I.T. department, the ability to look at the source code directly, and determine for themselves what security implications are involved.

Being “paid” has a bunch of downsides to Don, and likely wouldn’t be worth the hassle to him for the tiny benefit to him.

(This community is made up of Notepad++ users, including myself. If the @-username of a poster isn’t donho, they don’t speak for or represent Don. And Don rarely comments in anything but Announcements, and the occasional Humor post where he posts a meme then goes away again.)

unpaid and unlicensed software

Those can be mutually exclusive. Notepad++ does have a license. I think you mean installing “unpaid software that requires a license” - like letting “free-trials” run past expiration and keeping the software.

DISCLAIMER: I am not a lawyer.

Cheers.