The Forza games have been running on a proprietary game engine called Forzatech, and the use of a custom engine is obviously something that the British studio Playground Games is going to do with Fable as well. This was revealed through a job listing for a Graduate Rendering Engineer.
In the description, it clearly says: "This is a great opportunity to join an established and highly experienced AAA team, working with a custom engine." Playground Games is probably the best team Microsoft has when it comes to graphics (although the newly acquired id Software is going to give them a run for their money), and it will be very interesting to se what they have prepared for the comeback of Fable.
Fable is launching for PC and Xbox on a yet to be revealed date, although it most likely won't be 2021 and maybe not 2022 either.