In the past, Valve has hired some of their most longest-tenured employees from modding, although not necessarily on GoldSrc - Counter-Strike and QuakeWorld Team Fortress come to mind. (But of course never Richochet.) The Narbacular Drop team came straight out of DigiPen with a noncommercial thesis project as well.

Yes but it’s typically a subset of players making/using them and not the cornerstone of the entire product. They also dangle the promise of making money in front of people, but when you dig into the specifics it’s actually very hard to get paid. You have to cross a certain threshold to even eligible for a payout even if you have accrued a little cash.

The relationship of kids making stuff (the vast majority with little to no compensation) for a private, for-profit company is incredibly direct. That’s why it leaves a sour taste for many of us.

Remember that Counter-Strike started as a Half-Life mod, before it was acquired by Valve. So modding work is only almost always unpaid.

(Same deal with DotA and Warcraft, in the Blizzardverse.)

That's what the marketing materials say, and that's what they want you to think. In practice it's very difficult to break even on it, even if you have a "successful" game.