This used to be true before *gosub was widely used (and mandated by editors of CoG label games). When you look back to the code files for e.g. Heroes Rise or Deathless, you’ll quickly find examples of repeated language that would be tucked behind a *gosub today. Tin Star is massive, and brilliant, but comparing its word count to e.g. Choice of Robots (one of the first games to make heavy use of gosubs) is apples to oranges. Today, like Harris said, you rarely have much repeated text.
Games with minimal branching tend to have less code – so a high word count will reflect some balance of long story and high replayability/customizability. Either way, I think there’s something of genuine value behind the number – it’s very rare that you could accuse a high-word-count game of just padding out its numbers without reflecting something genuinely enjoyable and impressive about the experience.
And today’s mega-games with over 1m word counts definitely have way, way more actual story content (even stripping out the code) than your average fantasy novel. I expect when all’s said and done, my five-game series will have roughly as much content as Jordan’s 14-book Wheel of Time. (Would-be Brandon Sandersons: stand back, I’m not even 50 yet…)
Edit: having just checked CSIDE, my working draft of XoR 2 has 458,000 words excluding code, and 535,000 including code.