If it makes the creation of exploits (cheats) easier, then I think it could a big headache for a game company. I’d at least find it a lot easier to try to exploit a game a have the full source code for, than one I have to reverse engineer.
Cheating was so rampant in earlier titles that if it had been just slightly worse I’d probably have stopped playing.
Obscurity is weak security though of course.
It shouldn't be unless they're doing something unethical in loot boxes
Speak for yourself. I don't play at all these days, but when I did, I was almost always running a "pirated" version from my favorite torrent tracker, and only after purchasing a license which was almost never used (because of DRM, not being able to run it under Wine, or other reasons).
Or maybe they used to sell it externally before?
I appreciate them acknowledging this fact. It bothers me how many people think that leaking the source code of a game engine is an actual problem for the company.
Just because the code is available doesn't give you a license to use it. And the ones that don't care about having a license would not have used / payed for it in the first place.
Regarding knowhow behind modern engines, Unreal and CRYENGINE's source code is available on GitHub. Engineers often publish research papers about their methods and reverse engineering isn't as infeasible as one might think initially.
Also, speaking about Frostbite and what we've read about in the past (see Anthem), I highly doubt a developer can be productive using it while lacking official support.