And since the data from the disk/database (whether it's a Lua table, XML structure, JSON object, or a query) is then representend as a low-level data structure, that's essentially what hot reloading is - you deserialize the new data and hot-swap the pointers in the simplest terms.

>I've never seen a game where they hot reload code inside the gameserver itself, it's usually a downtime or rolling updates.

In World of Warcraft, you will literally have bosses despawn mid-fight and spawn again with new stats or you will see their health values update mid-fight, all without the players getting interrupted, their spell state getting desynced, or spawned items in the instance disappearing. This can be observed with the release of every single new raid on live streams as Blizzard employees are watching the world first attempts and tweaking/tuning the fights as they happen.

EDIT: Here's such an example, for the majority of the fight the extra tank could keep a spawned monster away from the boss, then mid-fight, the monster suddenly started one-shotting the tank, without the disruption of the instance, this was Blizzard's way of addressing a cheese strat to force the players to do the right as designed: https://www.youtube.com/watch?v=7gMm60BXAjU

I believe that only the "driver" code, which handles system calls and hosts the LPC interpreter and is written in C, couldn't be hot reloaded; everything else running in the game could be reloaded without restarting the server.

I'd guess in the modern day, there would be some games where Lua scripts can be hot-reloaded like any other data, from a database or object store.