I think you are putting your finger on a relevant subtlety. When we look back at those policies now we think of it s a deal, quid quo pro. I think it probably did function that way at the time too. But in terms of the philosophical argument underpinning the policy, its was based on the idea that by applying your labour you take appropriate property from the common, or you "make" property or whatnot.

This was based in ideas trying to explain what property is, why one person was rights to it and another doesn't. A wild forest is not property. A farm is. Hence labour, habitation, productive use etc. make something property. It's the kind of philosophy that gets very theological, with precise definitions and arguments between theorists that seem very arcane an pointless in retrospect.

I'm not promoting the theory. It just seemed relevant in the context of a liberal/libertarian quip. These ideas are foundational to ideas of private property, later economic freedom etc. It's part of the history of ideas related to right leaning politics today.

In practice, I'm not sue if this is workable. But if it is, I don't think an abstract sanctity of private property is necessarily a barrier. That unused property makes fro a weaker claim is justifiable by common sensibilities, right or left wing philosophy.