This is like the tail wagging the dog.
First, AMS2 is not on console. Most Project Cars sales are on console. The existence of AMS2 should not influence the direction of PC3.
Second, even on PC, AMS2 was always going to be a niche product. There were 10 people playing PC2 for every person playing AMS1 on steam. Even if Reiza doubled or trebled their market share (and it hasn't) they were not going to be a "thrreat" to PC3. Indeed PC2 has always sold better on the steam sales charts than AMS2, even though its 3 years old and still full price.
Third, SMS do not own Reiza. They will get a small % of the sales revenue of AMS2. SMS would not destroy their prime IP to help out Reiza. ISI did not stop making sims just because they licensed out their game engine.
Fourth, Paul Rustchynsky who was game director on PC3, joined SMS in August 2018 which was before Reiza had even asked to try the Madness Engine. I'm pretty sure SMS had decided to go for the Shift type game before AMS2 was even a factor. Paul Rustchynsky worked on Drive Club and Onrush prior to joining SMS. He is not the guy you hire for a hardcore sim.
Thanks for the info, I'm even more baffled by the decision to go sim lite then!