I'm not the most well-versed on the business aspect of gamedev, but to my understanding that's a normal practice. Teams are given seasonal / contract work and they're paid based on the work they complete, not on the profits drawn from the final product.
The gritty reality is that most videogame companies are virtual sweatshops where you work overtime for several months, finish the project and then hopefully find more work to do or get hired back on a few months into the future. Stories like this highlight the lack of job security that comes with game development as a profession, and it makes me feel guilty for buying anything AAA anymore, knowing that all I'm supporting is a broken system that doesn't value its workers.