I presume Mount & Blade counts as “open world?” And it was not a big-budget game when it was developed.
Anyway, you can do an open world in Unreal Engine today, with some combination of level streaming and origin shifting.
It requires a significant amount of elbow grease for the programmers on the team, but compared to the amount of work required by the artists to make sure the open world is actually interesting and has value across the size of it, that’s nothing.
You can make a 2x2km world today as a single level (perhaps with sub-levels loading when you get close) quite easily. And building useful content that is not repetitive, to cover a 2x2km area, is a LOT of work! The technology is not the bottleneck.