Earlier quoted context omitted.
It didn't go missing. Square had an institutional policy that had them deleting source once projects were mastered and shipped, through to the early 2000's. FFVII-FFIX, Parasite Eve and numerous other games lost their source. What's been recovered has been occasionally the code from contracted PC ports.
Why did they have such a policy? That seems crazy!
I cannot claim to know why they did this, but my educated/experienced guess as a long-time game developer is that _someone_ thought it would be best for the teams not to rely upon existing projects when creating new ones.
Imagine if painters always started from their previous painting rather than a blank canvas; or if a home developer always started with prefabs of their previous home. You'd get American suburbs and Ikea prints.