[G2A] Prey (2006) for $2+

Oh, right, yes. But as I recall, the courts dismissed those charges immediately, so it never really affected Masthead at all. The cancellation of the MMO was one of Bethesda's stipulations within the settlement (since they didn't want competition if they ever decided to release a Fallout MMO). Technically, the agreement only ensured that Fallout wouldn't be referenced at all within the MMO- the MMO itself is [theoretically] still under development, and gives the impression that it'll still stick to a similar setting. [Though, there hasn't been any hint of life since 2015, so it's probably dead. :P]

To put it more simply, Interplay threw up their hands and went "Yes, you can have our remaining Fallout rights for 2mil, just leave us alone to develop our MMO, damn you.". :P Followed, presumably, by them giving up entirely, and then just spending $2 million on alcohol.

Really wasteful, since purportedly they bullied out the team which had been developing Prey 2 (to the point that they went on strike and refused to work on the game any longer, on such claims), causing that game to get cancelled. Or as wikipedia puts it:

Reasoning on Human Head's departure from the project by 2011 are not fully known, though IGN, based on reports from those involved with Bethesda and Human Head, stated in 2013 that a rift had developed between the companies. As claimed by IGN, Bethesda had been pleased by progress up through the Electronic Entertainment Expo 2011 showing in June, and agreed to give Human Head an additional six months or more on the project to complete the game and still make the planned 2012 release; however, this extension was not written into their contract.
As Bethesda had expressed interest in buying out Human Head, one of the few studios capable of working atop the id Tech engines, the publisher started "to play hardball" with Human Head. Bethesda push[ed] harder on milestones and request[ed] additional features for Prey 2 that would normally have been given appropriate time[,] and [would have been] monetized in payment[s] to Human Head in the extension contract language if it [had been put into] writing. As Human Head was contractually only allowed to work on Prey 2, they had to quietly support other games like BioShock Infinite and Defiance as to pay their mounting bills.
At this point, around November 2011, Bethesda pushed on its offer to buy the studio, but Human Head denied the offer, and they stopped work on Prey 2, which they considered like a strike. Though the companies attempted some negotiations, no progress was made, and once Human Head's contract with Bethesda ran out in 2012, Prey 2 fell back into Bethesda's hands while Human Head proceeded onto other projects.

Bethesda's counter-claim was along the lines of "But why would we sabotage a project we'd invested so much into? Don't be silly. We play nice without third party developers. We're good, really!" which seems a reasonable argument until you keep in mind Bethesda's history of bullying tactics- it may just be that they overplayed their hand this time, with their causing that strike, when their intention had been to try getting more favorable terms from Human Head (as they'd managed with Interplay and Fallout, for example). Whatever the case, once Bethesda got Prey 2 back in their hands they dropped it, stating that the game hadn't turned out the way they wanted (another explanation could be that they couldn't find another team able to work with the id engine and existing code). They then quickly handed over the IP to Arkane, who decided "Hey, let's make a System Shock successor!".

So, yes- from a surface glance, it looks like they bought the IP, manipulatively supported the team working on the second game in a way that benefited the company's other projects, and forced the existing project to go under so they could apply the IP's name to a completely different game. On the less skeptical interpretation (one which dismisses Bethesda's history of such behaviors), various honest complications occurred after acquiring the IP, and Bethesda tried to recoup their losses as best as possible by applying the IP name to another project for the sake of the marketing boost granted by its name recognition.

All in all, rather an odd series of events.