Yes, of course the licence applies even without redistribution. Without a copyright licence, the user does not have the right to use, modify or distribute the c

Yes, of course the licence applies even without redistribution. Without a copyright licence, the user does not have the right to use, modify or distribute the code. But what the licence applies to is the original work. If you replace half of the original work with your own work, then the GPL applies to the remaining half of the original work, while you would own the copyright to your own half of it. GPL requires you to license modifications under the GPL only if you redistribute them. But if what you are distributing is modified to the point of being completely independent of the original, with none of the original code or any dependency on it remaining, then the GPL is no longer relevant to it.