Fable 4 uses the same game engine as the Forza franchise.
A new job listing at Forza developer Turn10 Studios (spotted by IGN) confirms that Forzatech, the studio's core game engine, is powering "three AAA titles in development across two beloved Xbox franchises." More pertinently, it specifies that "in addition to adding new features like raytracing to support the next console generation, we are also enriching the toolset to support an open world action RPG – Fable."
In other words, two of those three AAA titles are Fable and Forza Motorsport 8, and the third is presumably the next game in the Forza Horizon series. From an outsider's perspective, it's odd to think that the new Fable, which we can safely assume will be a fantasy RPG of some sort, is being built using the same software as a racing game.
But once you get over the upfront wonkiness, it does make sense. For starters, Fable 4 is in the works at Playground Games, best known as the home of Forza Horizon. And on top of widely used engines like Unreal and Unity, plenty of proprietary and custom game engines can be retooled every which way to suit a range of genres, experiences, game modes, and so on. So while this definitely sounds weird, it's not actually that out of the ordinary.
If nothing else, this is a welcome reminder that Fable 4 is, in fact, a thing. We haven't heard a thing about the sequel since its reveal last year, so we'll settle for even the tiniest bread crumb at this point.
Forza 8, fortunately, has been much more active, with another round of playtest invites going out just last month.