Yes, it's because of GPL restrictions: if you use my code, then I can use your (to some extent), so proprietary developers are forced to cooperate, which everyone job easier.

Linux is used by whole planet, but it's not a burden for Linus Torvalds.

Same for KHTML -> WebKit/WebCore -> Blink (LGPL), which is used even by such GPL haters as Apple and M$.

Same for Postgres and multitude of other liberally-licensed software.

> How much open source code is actually written by hobbyists working for free?

Initially, almost all of it.

> Most of the Linux code is written by paid engineers employed by big tech companies.

Nowadays. It didn't start this way.