it's basically like that in Arcane de-facto except with way more unrest between the two, an ineffective council in piltover, and uneasy peace among the zaunites while silco is alive to be followed by chaos after his death. If Silco signed the deal it would immediately become like the game.
You can see the corrupt prosperity of the undercity develop during Silco's rule. He's explicitly trying to keep up with Piltover but the hextech is developing faster and they only have shimmer, nothing fancier developed.
I'm pretty sure there was some series of big wars in the game lore before that status quo was established too? Not sure of that part.