From Halopedia, the Halo wiki
Mosaic was the codename of a video game project under development at Bungie, starting some time in 1993 after the release of Pathways into Darkness. Jason Jones was a lead programmer on the project. Ultimately, Mosaic was cancelled due to the poor reception of the first demo of Marathon, which spurred Bungie to focus their resources on the latter title.
Mosaic was conceived after the release of Pathways into Darkness, to address a number of shortcomings that Bungie felt were present in their previous title. Namely, the lack of texture mapping on floors and cielings, the low rendering resolution required to achieve acceptable framerates on lower-end Macintosh hardware, and the simplistic enemy AI. The game promised higher speeds on slower machines and "more action", when compared with Pathways. During the latter half of 1993, Bungie co-founder and primary programmer Jason Jones divided his time between Mosaic and Marathon, another 3D FPS project with similar goals, initiated after the completion of Pathways.
The key focus of Mosaic was its improved AI system. Bungie aimed to achieve greater variety in the way the game's enemies responded to the player, compared with Pathways. Jones described wanting the enemies to have behaviours including the ability to talk to and parlay with the player, and running away when facing the player alone, in order to gather up more enemies and return to attack the player. Additionally, the enemies were to be more sensitive of the current context and environment, such as being being aware of when they are in the player's line of sight, when they outnumber the player or are outnumbered themselves, etcetera. The enemies would then react accordingly to these parameters. Enemies would also have varying levels of intelligence, with some being dumber and more comparable to those in Pathways, while others were smarter, with a sense of fear and self-preservation, and the ability to cooperate with one another. Jones hoped that this variety would give each of the monster types their own personality, and allow the player to have different relationships with each of them, feeling complete contempt for some while being scared of others.
Both Marathon and Mosaic were slated to have demos at Macworld San Francisco in January 1994, but ultimately only Marathon had a playable demo ready by that time. Entitled Marathon Zero, the demo was created in an overhauled and improved version of Pathway into Darkness' engine. However, the general public was unimpressed with the game, dismissing it as Pathways but with minor cosmetic enhancements. Dismayed by this reaction but determined to salvage Marathon, Bungie focussed all their efforts on the game after returning from the trade show, and consequently Jones abandoned Mosaic and devoted his full attention to Marathon. Jones was reportedly reluctant to discuss Mosaic after its cancellation.