If the goal is photorealism, then characters are most of the time photoscanned. For faces or “naked” body parts, low poly models with good topology is projected on the photoscanned asset and textures are baked from there. For bodies and cloth, because outfits are probably different for each characters, this is often retopologized by hand. Some objects will still be 100% hand made (belts, buckles, hard surface stuff).
There are always some steps where the artists would fix/improve/stylize the results from the photoscanned data.
If the characters are cartoony (like Overwatch), it’s all hand made.
Most studios use Maya / Photoshop as base softwares nowadays, but artists can also use a lot of other softwares (Agisoft, RealityCapture, Zbrush, Topogun, Modo, Mari, Substance Painter, 3dsmax, rarely Blender - for now).
Studio tools are usually made for Maya (rigging and animation for instance) so this is usually the bridge to bring your art into the engine. But nothing really stops you from modeling in Blender and importing to Maya using FBX/OBJ.
About hiring people using free softwares… if you only know free softwares, it can be a problem, you need to know maya basics at least, I would say. But the portfolio is the most important, a great character artist using Blender could easily be hired if his portfolio is top notch. You can pick up Maya / 3dsmax quickly if you know Blender, it would take much longer to learn anatomy / sculpting / game workflows
Indie studios are usually more open to use open-source softwares, because software licences aren’t cheap, but big companies don’t care much. If you have to buy for a tool that would save you X amount of time and save you money, they are fine with paying for it.