

It wouldn’t be the first sort of game that Microsoft has remastered in that style, though.
The Halo 1 and 2 remasters used a separate rendering layer over the original game which included updated art assets, and a setting to toggle between the original graphics and the updated ones on the fly. For the most part it was fine, but there were a couple of (primarily out of bounds) areas where the original collision did not always align with the updated geometry.
But I am hoping that it is more than just a simple rendering layer over the original game, because like you said it would require more hands-on work to improve things like forest density and interior clutter. It would look odd if they just increased the polygon count of foliage while still leaving it as sparse in places as the original. At least based on the leaked screenshots, the side-by-sides do give the impression that things have moved slightly and additional objects have been added, so extra rendering layer or not, my guess is that edits to the original game are also still involved (and likely means there won’t be a Halo-style graphics toggle button).
Wouldn’t be much of a point, though. Skyblivion is already just about done. If they C&D it later this year, there will still be a 99% finished Skyblivion floating around on various hosting sites that they’d never be able to stop people from getting their hands on. Basically I don’t think it’s a question of whether or not Microsoft/Zenimax would want to kill the project to boost their own profits, but rather if they even could at this point, and I think the answer is no. A few years ago may have been a different story, but that ship has sailed.
It’s not the same sort of situation as teams making mods or romhacks of Nintendo games who (foolishly) announce it early and get C&D’d immediately before there’s anything to play. Skyblivion is something you can play in an almost-complete state right now if you wanted, and I don’t think a C&D in a few month’s time will stop modders from finishing it anyways since it’s so close to completion.