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My TLDR:
They took investors to found the studio, investors did what investors do, played with the shares at their business whim, the majority shareholding changes. The controversy from a legality standpoint being that the last single entity majority shareholder adquired the shares from funds of the studio itself. Then the other controversy, and more heard of, being that this shareholder pushed and went through the firing of the initial coofunders of the studio under a toxic cooworkers pretention, and these lost the rights of the IP that they once created before the studio adventure which the game is based of, though I would think that that was kinda obviously something to consider when they went for investors.
What is legal or not, still the case is going through Estonia`s legal system, what is true or not only themselves and god know xD.
Should you not buy? That`s for you to decide.
"Is it true that the original creators of Disco Elysium have been purged and no longer receive well-deserved royalties?"
The coofunders, and with it, the writer of the book in which the universe Disco Elysium is based on are the ones purged. The studio that made the game was not your 4-5 guys small studio, for what I`ve read and heard at the very least there was 4 more writers, these doing all the writting for characters dialogs, also a team of graphic artists, non of the coofunders coded, and ofc, whoever did the music and audio production and all the voice actors. So most of the creators seem like they are still on a payroll.
I haven't jack sparrow'd since getting a legal letter/warning from Warp Records for downloading Aphex Twin's discography. Scared me away for life
This bad
Does the original lead writer seem like kind of a "toxic" douche? Yeah, he actually kinda does.
Did the company also do some shady ♥♥♥♥ getting majority control away from the original team? Absolutely yes.
Just play the game for what it is: really good.
This video does a good job talking about it.. but it's 2 hours and 30 minutes long.
The answer to your question is- sort of? There are still a lot of talented people on payroll who worked on this game. But the "creator" is no longer affiliated with the team or project.. for good and bad reasons. The whole thing is ensconced in legal turmoil.