Comment My own take (Score 4, Informative) 184
I have been developing a game based on the Cube 2 engine, specifically the Red Eclipse fork. The benefits, as I saw it, was that the engine was Zlib-licensed, and most of the game code was re-usable (both Red Eclipse and my game are first-person arena shooters). The downsides were the lack of experience - the code is unfamiliar and sparsely-documented (and in some places downright bad), not many people are familiar with the level editor, and the model import system is not the most artist-friendly.
Currently it's at a proof-of-concept state - it's playable, the core gameplay is there, but it's using Red Eclipse assets that are CC-licensed, not suitable for commercial release, and the few maps are blocky and spartan.
I am seriously considering a switch to Source 2, because I'm much, much more familiar with Hammer and SMDs than with the Cube 2 asset toolchain, and I'm sure some of my Source modding experience will carry over to Source 2. I'm waiting for more details, though, particularly regarding the toolchain. I'd have to redo pretty much everything, but it would likely make for a far better product. Particularly if it ends up being ported to consoles - Red Eclipse lacks gamepad support, and having seen the code, it's not an easy thing to add.