Honestly, it's likely to facilitate the works of the devs who will actually be able to produce the better more noticeable buildings and assets since they won't have to take too much time on the minutia of the ones that "don't matter".
Need to see how it is implemented in-game first. Though they seem to be creating a large asset of tools to facilitate the creation of their large scale worlds. Reminds me of the article where they also showcased their tools for generating terrains.
They gearing up so hard on that next game and it shows. In itself, a custom engine like this is just bound to develop something that's excellent for the genre of games they are building instead of the all purpose UE, Unity, Godot, etc, we have currently.