It’s definitely not starting from scratch, it’s just throwing away what they built so far.
To be honest though although I’m not a game dev it does seem like a pretty reasonable decision given presumably the difficulties of maintaining your own engine. This will hopefully allow them to invest more time into different parts of the game and avoid a repeat of the Cyberpunk launch. I wonder if that launch and issues that lead to it was a big part of the drive behind the decision.
That said, I am a bit worried about what seems to be a bit of a consolidation happening with game engines after Unity burning a lot of bridges and now CDPR not moving forward with their in house engine. It’d be nice to see some more competition in this space I think. That’s my layman’s take at least, maybe there are already plenty of options that I’m just not aware of.