There's actually some truth to this statement in general. Most games, at least the ones deriving from quake engines that i know of, have an engine(e.g. the exe) and a game (a dll/so) plus assets. When modding SDK-s are released, it's essentially the source code of the game section that when compiled needs the same engine to run. New games from a studio using the same engine are usually just forks of the previous game code. It's fair to reason that some code may be shared to get updates on old parts while developing a new game.
Because all Valve games are mods all the way down.
When your game is a mod of a mod of a mod, this stuff happens.
I can understand bits and pieces, because that is very true with Valve... But the entire prototype?
for a 20 year old game it's probably only a couple of megabytes
There's actually some truth to this statement in general. Most games, at least the ones deriving from quake engines that i know of, have an engine(e.g. the exe) and a game (a dll/so) plus assets. When modding SDK-s are released, it's essentially the source code of the game section that when compiled needs the same engine to run. New games from a studio using the same engine are usually just forks of the previous game code. It's fair to reason that some code may be shared to get updates on old parts while developing a new game.
So yes, most games are mods of mods.