I'll be honest, and sorry in advance, but it'll help you more. Your cynicism is probably the thing getting in the way. I understand it's rough and not fun, but you've got to avoid it grinding you down.

You need to give yourself reasons to stand out. Making a half baked unfinished engine that no one uses isn't as impresive as improving an existing one that people use. Greenfield projects are rare and you probably not going to get that as a first role. So you need to prove to employers you can take legacy code, learn it, understand it, improve it and get it live. Demonstrating you have the capability to do that on a FOSS project demonstrates you may be able to do that on an in-house engine. You also learn from the code others write. Why did they do it this way? Is it better? What are the pros and cons? Degrees differentiate, yes, but a green person out of uni vs someone who has proven they can do a similar job, you have an advantage. Plus, 5 PRS is probably easier than a new engine. Making one from scratch cannot hurt, but it doesn't prove everything they need to know. Businesses hire because they have a problem and need someone competent to solve that problem. Tick those boxes and remove the risk and you have reasonable chances.

If you only demonstrate you're not comfortable going out of your comfort zone and getting your hands dirty, you are not helping yourself.

So give them reasons to hire you, give yourself a chance, and keep applying. Give yourself a 2% chance, apply to 50 jobs, give yourself a 10% chance, apply for 10, but always go over the odds.

Remember, industry is rough right now. A lot of experienced proven folk got let go in last year. Might need to improve your odds and bide your time.

You are right that having a shiny education gives people a huge advantage. It's not everything though.

For example, I have a friend who makes 6 figures in europe doing performance-oriented C++ work, with no degree. Once you get the first job it becomes far easier.

Getting the first job is tough, but having personal projects really helps. Don't undersell yourself. You need to give people the impression that you dropped out due to pure happenstance (e.g. health or family issues that are now resolved). Make them think that you are a lucky find; if you had finished the degree you'd already be at a bigger company with a bigger salary.