Never any doubt it was running real-time in engine, but given the very precise way everything flowed and was framed (tightly scripted and basically on rails) the distinction between "gameplay" and "in-engine cut-scene" is razor thin.
You can make something go from looking good to great by carefully controlling the lighting, framing and edit. Which isn't to say its "cheating" because what it represents is purely more work on the part of the devs, just that realistically it implies constraints to player agency. As I pointed out in another post, a QTE is both gameplay and an in-engine cut-scene because although the event is triggered by the user its still a "canned" event.