Why would you assume Carmack did everything he gave to Zenimax in his time off?

It seems a lot more likely to me that he felt he was entitled to spend his time however he saw fit and did the VR work during work hours. I doubt if it would have even occurred to him to differentiate between "work time" and "time off".

Because that's (possibly) what his contract says?

This is where the "just sign it" attitude is going to bite some people.

People sign work for hire agreements all the time that grant ownership of everything to their employer. I cannot speak to the enforcement of these agreements, but they are common.

I wonder if they made him sign an employment agreement as a condition of their acquisition. It's common for these agreements to confer all rights in anything developed or conceived, on the clock or off, with or without employer resources, regardless of subject matter, to the employer. These provisions vary in their enforce-ability by state. Generally, if the IP relates to your job function, even tangentially, it can cause a lot of grief.