It seems like the project is meant to show that they understand the frustrations of people who didn't understand where the Game Engine was gone. And in the same time, to develop / polish Blender in regards to game development.
The question stands though: Is DOGWALK even Libre?
MIT is still libre per GNU definition. https://www.gnu.org/gwm/libredocxml/x15.html I assume you mean copyleft for software license. closest thing to copyleft in creative commons is cc by-sa https://pitt.libguides.com/ld.php?content_id=18024633.
There is a difference between engine code and game’s code. There is definitely custom code written specifically for the game. And that code should be published too. And it should be licensed too. And at the moment the way it is published kind of makes it unclear whether the game is libre or not.