"Bethesda Game Director Todd Howard explained in a separate interview with IGN that his game would not use id Tech 5. The studio's new engine built for its upcoming title is more beneficial to creating huge, open-world games, such as Fallout 3 and The Elder Scrolls IV: Oblivion, while id Tech 5 is better for more contained environments." (http://pc.ign.com/articles/111/1112464p1.html)
Admittedly this could be a misunderstanding on IGN's part. It could also be that "new engine" simply means this was redone from the ground up even if the foundation was kept the same which would be in line with what you referenced.