It's a Source 2 folder but there's a hl3_imported (alongside dota 2, tf2 and l4d2) folder which clearly suggests that HL3 was imported into Source 2 from Source 1, proving that HL3 has been in development since before Source 2.
It really is frustrating how everyone keeps saying this or that type of game is dead and has no place in the modern video game landscape. It's really not "players don't want it", but more "developers don't want it". Players LOVE these games. Wolfenstein: The New Order is a perfect example.
But...
We don't know anything for sure yet, but given that there will be a Vulkan version of Source 2, and Vulkan is promised to run on any device and operating system, you could theoretically develop for Android with Source 2. God knows how well it would run on mobile devices without heavy...
Yes, but the thing is, the fact that they've actually officially announced it now means that the engine is ready or at least very close to completion, which is very exciting indeed.