The source code is on github. Has been, for years.

https://github.com/osgcc/no-one-lives-forever

Yes. Copyright still exists regardless of how the content is obtained.

I can hand you a disk full of my source code, but unless I give you permission to reproduce it it'd still be illegal to reproduce.

Otherwise all the property rights of anyone can be nullified just by one person with access to it, clearly that's impossible in our legal framework.

Yes. Copyright infringement is copyright infringement. The penalties for willful infringement are higher, but for unwitting infringement they are not zero, and IIRC for infringement for profit there's a high statutory minimum fine.

If you don't mind breaking the law, it's probably a bit more efficient to just torrent it.

In this case, they already have the source code; someone along the way just gave it to them.

No, but they can always be ...fired.