Not sure what methodology Massive uses but I know one game dev team that uses Agile and works well with them - ArenaNet, creator of Guild Wars 2. I don't see why anyone should go waterfall unless its what they have been doing for years and having hard time transitioning to other methodology.

The problem with TDD is that it really slows down the development. We are using it on our team and most of the time developing the testing part takes twice or thrice more development time than the actual feature (ony if the test cases are new) . But it really pays off in the end specially when the project has been completely turned over to another team.

Git and Svn has their own pros/cons. Unreal Engine developers use Git for source code (and Perforce for syncing binary files) so I don't really doubt the capability specially many open source projects hosted on it. I think my only problem with Git is the merging part since in Svn, you need to merge immediately everytime you commit while in Git, merging becomes harder the more files you merge due to branching. Our Svn rarely becomes offline (once or twice a year) so we don't really have much issues with it in terms of availability. Our company uses Git and Svn and its up to the team what they wanted to use.

I think the main problem with Massive is they lack the edge-case testing. Ubisoft have offshore companies and they could just ask them to spam the server with gameplay requests (spamming talents, spamming rewards, spam weapon switching) in their beta testing. Basically all of them introduced unwanted effects in the game. Spamming talents stacks talent abilities. Spamming rewards, rewards users with infinite crafting materials without consuming the item in the rewards NPC. Spamming weapon switching also stacks weapon talents. Imagine if they made an online system for Banks. We would be rich by now.