I've been following OpenMW for quite a while and they are getting really close to getting version 1 out.
The only major things left are ai, disease, facial expressions and various bug fixes.
I would be very surprised if they didn't release version 1.0 this year.
Hopefully after that, they can fork their codebase and start on remaking Oblivion and Skyrim. Apparently the engines are all very similar, and share model, archive, and character formats. They have already stated they can't remake the two sequels within a Morrowind setting, but they can fork the engine and start reimplementing the two games.
Ok. OpenMW goal is to recreate the morrowind game engine. They almost have it done.
They are also working heavily on tools for modding and creating new content for the game engine.
They have stated after achieving 1.0 they will start adding additional features/capabilities to the game engine so that modders can do stuff that wasn't possible in the original morrowind game engine.
So in theory, a person/group could use the game engine to create a rpg like morrowind.
That is very neat but if memory serves me right, you have to use your own models, so in the context of OpenMW you still need a game license to be able to play the game even though the engine is a clean-room open-source implementation. Still, great starting point.
Yes. If you wanted to create an rpg for sale you won't be able to use the morriwind game assets.
In addition to this, they actually got blessing from Bethesda. But they were strictly told not to make mods that blended Morrowind and Oblivion or Skyrim together. They are allowed to re-implement any Bethesda engine they want as open source. But they are not to blend the games. The games are individual works of art and their integrity is not to be infringed. So the codebase can be forked into OpenOblivion and OpenSkyrim, but you can't make a mod that lets you play from Morrowind to Skyrim.