I guess the first level it shows (I don't know if it's a custom level or one of the builtin ones) the light is great even beacuse the level style is quite minimalistic. In the entry level, instead, it gives me the idea of a "patchwork" lighting, where, as you said, low res environment is mixed with superb lighting effects. But, aniway..great work by Nvidia!
I'd like to see how Quake 1 would look like with that light..

My idea would be to take FTE, completely undress it of all the quake stuff (mdl, server, palette, bsp, menu,) and leave a client-only barebone system that accepts only opengl 3.3+(or in this case DirectX 12) as renderer and make some tests, but it's far far away from my skills