The in-house tool-set they're using isn't something they just ran automatically across an entire model (It may have this option, I have no idea). As they've already explained (and you can even see it for yourself) sections of the gear are separated and compressed based on these segments, where detail isn't needed or could be reduced to lower the texture memory impact they simply lower the resolution for that area.
A simple "Does this segment look okay? Yes, >Save"
As segments of the gear/items are compressed more than others.
It's not a particularly difficult process with a tool like this, just time consuming (although less-so than doing it manually) This is what they used to convert 1.23 > 2.0's models originally to speed up the process.
I'm aware of this, and you sculpt at a higher subdivision of polygons and or triangles, it's not resolution based.
That would be very very unlikely unless someone decided to completely throw the standard asset pipe-line out the window.
It's baked from a high-poly model, not a high-resolution model. And they've shown in the past that the original baked maps are of a much higher resolution.
When applying a normal/bump map to a low-poly model the overall resolution of the texture(s) can be as high or low as you want, there's no real restriction. (Well, roughly 8192*8192 is the limit, but we're not making a movie here)
The resolution of both the diffuse and any bump/normal mapping makes a HUGE difference. The pixelation caused by lowering diffuse and normal maps is very easy to see. It's mildly frustrating but nothing game breaking.
This is evident more than anything in the texture compression.
Which is why the break-blade looks so horrific and even more so when a light-source is shading the normal maps on it.
However the textures in this game aren't horrific in any way, but the originals are sitting there, it would mostly be a "Is it worth the time?" Q/A.
If they firmly said "Nope, never" to it, I wouldn't care too much but as you said, it's something you could leave with a few interns to do.

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