The engine team is small, 10-20 people max, if FM8 fails the main team will be disbanded and the engine team folded into Playground Games, the car list is not built in-house but by multiple outsourcing studios, T10 is not needed for this task at all.
The simracing market is way oversaturated with quality games compared to the arcade racer market where Horizon can dominate because the competition is slim. FM8 needs something special to stand out and Turn10 hasn't shown this something yet. I'm sure a lot of people will try it out on gamepass but how many will stick around?
Might I remind you that sim racing is saturated but FM doesn't participate in that group. It is a simcade. Lot more people will pick it up because it doesn't require a wheel to be playable. It doesn't need 40 gorillion hours of setups and learning to jump into. It can provide the experience of building a car and racing it to a 9 year old and a 50 year old at the same time.
None of the Sims compete with it in terms of sheer car variety (unless gt7 comes to PC, wink wink Polyphony). It is also going to be pretty enough to pull people in just for that.
Forza also has the advantage of being an Xbox game, which has virtually no good track racers with road and race cars. In fact I can guarantee you that the lack of FM for about 6 years now, will only make it more hyped when it releases.
Best of all, it has the Gamepass safety net. And also the fact that it is going to be a long term forza rather than 2 year sequel cycle, means that even if it launches in the worst possible way, t10 can easily turn it around as time passes. All the features that they have promised point to a decent game at minimum barring bugs.
On their own, full dynamic time and weather with pit strategies, a full penalty system, drag mode and upgrades like anti lag and customizable gearboxes carrying over from fh5 mean that it will feel like a good enough upgrade over fm7. This doesn't even include the new online race weekend system (practice, qualy, race) or the big physics upgrades with smaller things like reworked Aero, kerbs and rubbering of the track.
On top of this, it looks visually like a huge step up from all the Sims it competes with on PC and Xbox. The only people it probably won't impress are sim racers (who t10 shouldn't even try pleasing because for whatever reason they hate it when games are accessible).
This doenst even cover the other features that haven't been shown yet like the new parts, the new career mode and the rest of multiplayer. Even without these it will be a good enough upgrade over fm7 for a lot of people.