Tearaway Unfolded on PS4.

The studio aren't huge in terms of manpower, last I checked they have less than 70 people, they're actually a highly viable business because their games don't require huge sales to be profitable and what profits they make more than cover the development of future projects, while feeding cash back to PlayStation.

Their last release was Tearaway Unfolded on PS4, which released about 3 years ago, it sold modest numbers, but it was largely a remake of the Vita game, so it wasn't a very costly project. Unfolded was also only developed with a small portion of the whole studio.
LBP 1 & 2 did big numbers, which will have garnered MM great favor with Shu and the rest of the higher-up's at PlayStation. MM are also Sony's creative test bed Studio, their small-scale business with Worldwide Studios is worth the costs they may incur Sony in the run-up to releasing their next game.

Unless a Studio costs Sony big financially they're fine eating stuff like the cost of making something like Dreams, you have to bare in mind PlayStation has added significantly to Sony's bottom line, through PS Plus Profits, huge profits from 3rd Party Sales, plus hugely successful projects like Horizon Zero Dawn, Uncharted 4 and other exclusives. If MM had cost Sony a lot over a long enough time then they'd possibly be in the firing line, but as studio they haven't.

TBH Bend's Studio are bigger and haven't released anything since Uncharted Fight For Fortune in 2012, yet they've given the leeway to make a huge open world game for the last 4 years or so, Santa Monica Studio were working on a massive new IP which reportedly cost Sony over $100M, yet the game got cancelled and while some staff were sacked they've been given huge funds to make a completely new God of War, which takes the series in a new direction. While Ascension sold well, it's been about 4 years since the last GoW.
Santa Monica Studio does keep themselves ticking over with smaller collaborative projects, but they're more at risk than a Studio like Media Molecule because of their scale, which incurs Sony a much bigger financial cost.

Media Molecule are fine, especially until they release Dreams, but even if Dreams tanks in sales the Studio are small and provided they keep coming up with interesting ideas that Shu and co like, they'll be kept around for a while yet, probably until the PS5 comes out and Sony can use their creative ideas to show off what the new hardware can do.

Actually MM did have a team that worked on Unfolded, it wasn't the full studio, they were helped by Tarsier Studios.

I forgot Unfolded released in 2015, thought it was a 2014 game, but MM have put out a title and sold software since LBP 2 and the Vita version of Tearaway, Sony sees them as a viable part of their business, just like Bend and other studios which haven't sold a tonne of software since PS4 launched.