Release of Modifications to Engine Source

We are a group of students currently in the midst of choosing a game engine to work on a project that would entail modifications and extensions to the game engine.

Unreal Engine is our preferred engine but since the project is likely to require us to publicly release the source code of at least the parts relevant to the research undertaken in our project, we are unsure if Unreal is suitable.

It is stated in the Unreal Engine FAQ that

The only parts of the Unreal Engine
you can’t release to the general
public are the source code and tools
or modifications to them; these
components may only be distributed to
other licensees with access to the
same version of the Unreal Engine.

We would like to clarify if this is still applicable given that the Unreal Engine no longer has a paid subscription.

Yes, that’s still applicable; licensees aren’t permitted to release UE4 source code. You are permitted to release your own code though. I know for game jams like Global Game Jam, participants are required to release their game code, but there are exceptions for proprietary engine code. So maybe your program will work like that.