Most of the cloud providers have generous enough free tiers that small developers fit into them. Look at EOS, Playfab, Steam. You can run a backend for free for < 5k players with lambda and dynamodb.
edit:
> To my knowledge, cloud services are usually used for simple stuff like logs and analytics
Respectfully, you’re wrong here and this is the problem that me and many others have with this line of defense for SKG. No small developers who are managing their budget tightly are storing logs on AWS for analysis after the fact and paying for it. They’re using services like Sentry that do it for free or for $19/months. They’re using services like playfab for parties, vivox for voice chat, flex match for Matchmaking. Those services are free for small amounts of use that 90% of games would fit under.
The question remains - how does any of this prevent small developers from releasing either the binary or the code in the modified form? Again, that has already been done with variety of games (not just popular ones as you assume), so it's not something extraordinary. The developers definitely have the resources to do so since they were getting money for the game, and the least they can do for their game and its community is to give it to them after they stop supporting it themselves.