Going closed source is making the branch secret/private, not making it obscure. Obscurity would be zipping up the open source code (without a password) and leaving it online. Obscurity is just called taking additional steps to recover the information. Your passwords are not obscure strings of characters, they are secrets.

If there is a self-hosted version at all, then the compiled form is out there to be analysed. While compilation and other forms of code transformation that may occur are not 1->1, trivially reversed, operations, they are much closer to bad password security (symmetric encryption or worse) then good (proper hashing with salting/peppering/etc). Heck, depending on the languages/frameworks/other used the code may be hardly compiled or otherwise transformed at all in its distributed form. Tools to aid decompiling and such have existed for practically as long as their forward processes have, so I would say this is still obscurity rather than any higher form of protection.

Even if the back-end is never fully distributed any front-end code obviously has to be, and even if that contains minimal logic, perhaps little more than navigation & validation to avoid excess UA/server round-trip latency, the inputs & outputs are still easily open to investigation (by humans, humans with tools, or more fully automated methods) so by closing source you've only protected yourself from a small subset of vulnerability discovering techniques.

This is all especially true if your system was recently more completely open, unless a complete clean-room rewrite is happening in conjunction with this change.