That's not entirely true, if you distribute object code(ie compiled program) from the work you're subject to distribute both verbatim and modified source copies of the code if someone requests it. So in a sense it would require someone to release the code in that situation, in this situation they clearly didn't do that however.
Of course the GPL also allows anyone who receives the source code to also distribute the source code, and bars further limitations being placed on that distribution. So anyone who in this case: 'EQC's Dev Team with source access' was completely within their rights to further distribute the entire source with or without the permission of the other people in the team. It may "suck" but it's the tradeoff you make when using GPL code, it's only closed source as long as everyone in your team wants it to be.
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