There's Android and there's Android.
1. There's the version of Android maintained by the AOSP that is fully open source.
2. Then there's the version of Android that Google releases exclusively for its Nexus line of devices. Although it contains some codes common with the open source, AOSP, codes, it also contains some closed source features like Photosphere. Note that Photosphere is not merely an additional application, but Google is marketing is as a part of Android 4.2 released for the Nexus devices. Since Photosphere is closed source, thus this version of Android cannot be said to be open source.
So, if someone says that Android is open source, he's correct. But if someone else says Android is not open source, he's also correct. They're just talking about different Androids.