Textures cause project size to be huge!? Do developers compress Unreal Games to make them smaller?

When you create a build out of UE4 it already compresses the files, so definitely the files are compressed in Soul Calibur, the question would be if they do more compression or if they even implement their own version of compression instead.
For GPU memory the texture dimensions control the amount of memory it uses even if the source file is compressed and small, so 4x 1024 textures is equal to one 2048 texture
As far as atlases go, UE4 does some of that itself

Tiled maps are repeated maps in the material, so it allows you to get small detail on a large surface but it’s a repeating texture so you need some way of breaking it up so that people can’t so easily tell that it’s repeating.