Unity is absolutely being squeezed between the two. I can't really see how it can compete with Godot at the low end; it's hard to compete with free, and most of the goodness in low end games is the gameplay logic, not graphics or animation. And Godot can only get better; look at how Blender ate the CGI tools market. This leaves Unity having to either compete with Unreal at the high end - a very high bar - or somehow finding a new business model. The switcheroo they tried to pull on their customer base can best be viewed in that light.
Godot isn't quite free if you want to release on consoles since those platforms are only supported by commercial forks, but I'm sure going down that route is still a hell of a lot cheaper than licensing Unity.
It's a bit of a weird edge-case, but the very popular Battlefield 6 is partially a Godot game. It's an odd hybrid of a proprietary in-house engine with Godot grafted onto it, which serves as a public-facing SDK for players to build their own content. I know that's not exactly what you meant but it is an interesting application in a major AAA title.
Battlefield 6 of all things includes Godot as core of the Portal map-building. Casette Beasts is what Pokemon wishes it was. Upcoming Planetenverteidigungskanonenkommandant looks gorgeous from the previews.
I don’t know if I could list something that matches say Cuphead or Silksong, but I do think that Godot is currently on a Clayton Christiansen-style worse-is-better ascent right now.
Maybe a bit of an exaggeration. But I think at least 30%. Unreal is popular too. Unity seems to be more popular for indie/coop/single player/certain art styles. There seems to be many more unity games overall, but a lot of them are very small.
