But that's not at all how things work. Most FOSS devs do it as a hobby or as part of a day job working on proprietary software. Very few FOSS projects employ full time developers, and for those that do, it's rarely a majority of the code changes for the project.

But let's say we somehow convince governments to fund FOSS development, they're not going to want to fund game development, they'll fund one Linux distro and the software needed to fill government needs.

If a large game engine like Unreal Engine suddenly switched to the GPL, game devs wouldn't touch it with a10 foot pole. They'd either develop their own engine, switch to a different proprietary engine, or use something like Godot where they can keep their project under a proprietary license.