Firstly....FreeSpace 2 came out in 1999. Soon after that I began work on Warzone. I forget when I released that but it was after I had already started working on a few details for BWO. Then Kellan was involved and we began working on some of the story even before Derelict was released.
Then myself (Warzone) and Kellan and Agatheron (Derelict) got together, put together an internal site on Volition Watch, and we spent quit a few productive months on BWO. Then the project expanded...we had Dark, Bobboau, Dynamo, and allot of other people coming in and out of the team at the time. And things were pretty productive until much later on when things at Volition Watch slowed down....then the forums at VW were hacked and we had had enough so we closed that site down. I moved some resources from BWO and other projects (just as TBP) from VW to HLP and we've been here ever since.
My feeling at the time was that HLP and VW as separate entities were not strong enough to preservere but that by combining what forces were left and what interest there was left that we'd have something strong to work from. Overall the plan worked...HLP is as strong or even more strong now than it was before. We've got the best of the community collaborating together on the Source Code and we all know what a success that was as well.
BWO sort of got lost in the move. Agatheron had long since gotten busy with real life and moved on. Kellan was around the time of the big move and so was Dynamo. Dark disappeared a long time ago...a VERY talented artist and 3D modeler but no idea what happened to him. And that left me...I don't have the time like I used to but I try and keep things on track now and again.
BWO's had the services of quite a few different team members...especially Ace who brilliantly finished off many unfinished missions and built several more. But after that....for a while we were stuck. We had finished the missions but our models were from the early 2000 era. Good for the time but not even slightly competitive with the newer graphics. So thats being worked on, the voices are being worked on, we finally got a couple of people to help us with upgrading our texture maps (the 3D portions have been in good shape for a while). But we don't and never did have a big staff like Inferno or TBP or any of those. Maybe we should have and its probably my fault and Kellans fault for weaving a neat storyline that we didn't want to tell anyone the details of...because it'd ruin the whole thing. So nobody would be really interested. We don't have gargantuan ships either so we couldn't be a part of that whole thing either.
BWO and Machina Terra are the two closest in concept campaigns out there. In retrospect...maybe we should have pooled resources. We're different takes on the same theme. But whats done is done.
In any case....yes BWO is a takeoff of the plots from Derelict and Warzone. We worked out how the stories would fit together (they happen at nearly the same time) and we worked out how some of the two stories would inform the BWO plot.