It's not just graphics, it's everything. Look at Frostbite for example from EA. While a good shooter engine, they had to make significant changes over the years to adapt the engine to other genres of games, and that significantly bloated timelines. Jason Schreier has reporting on this if you're interested.
We kind of forget that a lot of custom engines aren't universal ones like Unity or Unreal that can adapt to anything you throw at it. Custom engines are largely hyper specific to the type of game they were making with it, everything else is experimental, untested, undocumented, or non-existent!
Frostbite is a weird example because they focused heavily on graphics over gameplay. It is also an FPS engine that was forced into powering an RPG, and without any real input from the developers in question.
I'm sure most larger gamedev companies can make a decent game engine on their own if extreme performance is not needed. The recent Baldur's Gate is a good example.
We kind of forget that a lot of custom engines aren't universal ones like Unity or Unreal that can adapt to anything you throw at it. Custom engines are largely hyper specific to the type of game they were making with it, everything else is experimental, untested, undocumented, or non-existent!