Is Case 3 superior to Case 1? Is it because it of 'better encapsulation' or 'more loosely coupled', or some other reason?

From what I see in your implementation, your Case 3 implementation requires an abstract class which can implement pure virtual methods which can then later be changed in the derived class. Case 3 would be better as the derived class can change the implementation of do_work as and when required and all the derived instances would basically belong to the base abstract type.

Which Case is the best for a software project which might have 40,000 lines of code.

I would say it purely depends on your implementation design and the objective that you want to achieve. Abstract class and Interfaces are implemented based on the problem that has to be solved.

Is Case 3 superior to Case 1? Is it because it of 'better encapsulation' or 'more loosely coupled', or some other reason?

From what I see in your implementation, your Case 3 implementation requires an abstract class which can implement pure virtual methods which can then later be changed in the derived class. Case 3 would be better as the derived class can change the implementation of do_work as and when required and all the derived instances would basically belong to the base abstract type.

Which Case is the best for a software project which might have 40,000 lines of code.

I would say it purely depends on your implementation design and the objective that you want to achieve. Abstract class and Interfaces are implemented based on the problem that has to be solved.

Edit on question

What if 3 months from now, Joe Coder creates a Doctor Employee, but he forgets to call increment_money_earned() in do_work()?

Unit tests can be performed to check whether each class confirms to the expected behavior. So if proper unit tests are applied, bugs can be prevented when Joe Coder implements the new class.

Is Case 3 superior to Case 1? Is it because it of 'better encapsulation' or 'more loosely coupled', or some other reason?

From what I see in your implementation, your Case 3 implementation requires an abstract class which can implement pure virtual methods which can then later be changed in the derived class. Case 3 would be better as the derived class can change the implementation of do_work as and when required and all the derived instances would basically belong to the base abstract type.

Which Case is the best for a software project which might have 40,000 lines of code.

I would say it purely depends on your implementation design and the objective that you want to achieve. Abstract class and Interfaces are implemented based on the problem that has to be solved.

Is Case 3 superior to Case 1? Is it because it of 'better encapsulation' or 'more loosely coupled', or some other reason?

From what I see in your implementation, your Case 3 implementation requires an abstract class which can implement pure virtual methods which can then later be changed in the derived class. Case 3 would be better as the derived class can change the implementation of do_work as and when required and all the derived instances would basically belong to the base abstract type.

Which Case is the best for a software project which might have 40,000 lines of code.

I would say it purely depends on your implementation design and the objective that you want to achieve. Abstract class and Interfaces are implemented based on the problem that has to be solved.