All of the code for the UI, server-side game logic, and client-side game logic in Quake 3 was run in the VM. It allowed code to be stored with game data, and client-side mods to be safely downloaded directly from the game server.
The link in the sibling post has most everything you'd ever want to know about it.
It might be worth mentioning that there’s a long tradition of this pattern in game design. In quite a few cases, much of the game logic is separated from the graphics engine, in a simpler language with an interpreter.
In the case of world of Warcraft, the Lua interpreter allowed for a rich ecosystem of UI (and light behavioral) addons. In some cases very popular addons features were added into the core UI in later updates.
I find that arrangement pretty compelling. In the few cases where I’ve worked on or with a team with addon support I bring this up: use the community sourced features as a popular vote for what to incorporate (just be sure to reward the author somehow).
The link in the sibling post has most everything you'd ever want to know about it.