Seems like a fantastic idea and I hope they do really well
Has any other big game been made this way and how did it turn out?
Koing
I would say there are a number of parallels to Dota2.
At least in the way monetization is supposed to work, and how they've drawn on the developers of the original to get to work on the re-imagining.
That turned out pretty well, I'd say, it's turned into Valve's WoW, in a way.
Of course, by linking engine development with game development, as has been the case with UT for a while, where the Unreal engine has been showcased by the UT of its generation, they can go a bit wider, and that's where the development tie-in makes sense. By also offering a market for mods, many games might just get sold through that market as UT mods, even though they're really total conversions, depending on the publisher backing the developers have.
All in all, this is turning out as good as one could expect, let's hope they can also make a good game in that framework.