I think it's better to have a culture where engineers naturally feel comfortable leaving their offices.

I worked at a company that had 3:00 tea time, like in academic departments. People drank coffee and played board games, but after half an hour, they were talking about work again and the cross-department communication that was needed would happen organically.

That's a lot better than subjecting engineers to a 24/7 open-plan arrangement that will, after 8 hours at a stretch, wear on a typical person's nerves and health.

I agree with you that 2- or 3-person offices will probably provide enough privacy for most people. Individual offices have their perks, but they do require attention to common spaces and communication to prevent the siloization you talked about.