Usually “production” in those contexts means running on a cluster or supercomputer somewhere. That, or code being run on a machine not controlled by the developer by users who do not write code but just run a pre-existing program with different inputs. That’s how I (and colleagues) typically use the term ‘production’ in the academic/research environment that I work in. The issue with things like MATLAB in production is the lack of a license on the machine you want to run on - often people have it on their workstation, but if you get time at a supercomputing center or department cluster, odds are your local license doesn’t translate over to the system you want to run on.
But in both commercial R&D and academic R&D, some code really needs to live on for future people to benefit from it. It's just not a good use of research time for people to re-write everything from scratch... every time.