If Production Group 2 have been using EPD's engine and tools since Breath of the Wild DLC, and recruited heavily and then had ~110 staff using the new engine (Module System?), would it also make sense for PG2 to use EPD's engine for a Monolith Soft title? There'd be obvious benefits to that, not least that small numbers of EPD staff could also assist if needed.
But obviously, there's also benefits to PG2 staff being trained in using Monolith Soft's own engine, because staff could then be assigned to Xenoblade/PG1 projects as needed.