I read somewhere that pulling off the great shooting mechanics in RAGE's smaller areas/controlled encounters, along with everything about much of the world construction they tried to do, helped them reconsider the original path Doom 4 was taking. (Which was like RAGEx4 in some places.) In a sort of: "Look how enjoyable it was in that game, wonder if we should make a whole game based around it primarily...you know, stripped back, no cars, etc."
The open worlds in Mad Max and Just Cause 3 weren't really the problems, it was the totally lackluster scenario and mission designs, a lot of generic checklists to deal with, in JC2 a lot of these had been hidden/bonus objectives that encouraged you using your stupidly overpowered abilities to uncover. 3 especially was just like "destroy all these towers" and hooray, you liberated the area.
id providing guidance for the missions, while Avalanche does the grunt/open-world work could be a cool team-up.
