Quick answer: XD INC, the current owner of Torchlight, is updating Torchlight II through an optional Steam beta branch and says the work uses AI-assisted coding tools. The latest beta adds native Linux and Steam Deck support, WASD movement and controller fixes.

Torchlight II is getting updates again, 14 years after launch. XD INC is reworking the classic action RPG through an optional Steam beta branch, and the newest beta adds native Linux and Steam Deck support.
The first beta went live on October 22. It switched online multiplayer to Steam account login instead of the TapTap.io accounts the game moved to in September, added controller support on Windows and macOS, and added render scale and FXAA settings, along with crash fixes and faster map loading.
XD is open about how the work is being done. In its Steam post, the team said restructuring the game's old code is hard, but "new AI-assisted coding tools have opened up more possibilities for reviewing the code and addressing longstanding issues." It also says changes go through QA and compatibility testing.

The October 30 beta update brings Linux support, and XD says the game can now be played on the Steam Deck through it. It also adds WASD movement, directional audio with a surround sound toggle (not available on Linux yet), a fix for misplaced mouse clicks, and several controller and UI fixes.
All of this is opt-in. You pick the public_beta branch under the game's Properties and Betas tab in Steam, and the default version stays as it is. The two branches share save files but can't play multiplayer together, and XD says some older mods may not work on the beta.