The ownership of those works is certainly a complex issue. Contractually ownership would have been assigned to id, but what happens for unpaid work? What about works in progress? Depends on the contract terms and the interpretation of those terms. Sounds like a lot of grey areas, and there can be significant repercussions for making spurious DMCA claims.

The ugly truth is that DMCA claims are mainly a weapon against smaller creators, you can't realistically use it against big companies in reality.

As an amateur it sounds a bit like copyright with a lien or caveat attached. They legally own it now, but can't legally use it since it was rejected and not paid for. It's not as clear cut as if I personally ripped BFG Division to put in my indie game.