the support in mainline kernel is improving over time. It is not fully supported yet, but clearly between June 2015 (and 15.06) and now, a lot of patches have been merged.
The firmware ‘blob’ that are mentioned in the release notes are firmware, not proprietary (user space) components. The blob are s/w program that don’t run on the main ARM CPUs, but on the various IP block (wlan core, GPU, DSP, …). The current license for these blobs do not allow us to include them in the linux-firmware package that all distro usually ship. But to some extends, the blobs have nothing to do with the ‘upstreaming’ efforts.
For the Debian/Ubuntu/OE release there is no proprietary software in our builds beyond these blobs. In other words, on the main ARM CPUs all the s/w is open source (including the GPU driver which comes from mesa).
For the Android builds, there are user space proprietary components (libs) which are released on Qualcomm Dev Net as object files.