I believe that after MO the team moved on to look at ME before Lorne decided to take a completely different route. That would be a more fluid progression of development, one that wouldn't even have demanded a new game engine necessarily. But that's a technicality.
I would be concerned if a development team of any kind turned 'round and said “Look, we're sorry this isn't very good, but we were working on other things.” I would expect them to finish that job as best they could without letting more peripheral projects stand in the way. Overlapping development of games is common. It's surely more down to technical and time restrictions.
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