They're all CGI. Everything on the screen in SW is CGI.
Max is contrasting the pre-rendered cutscenes (the intro, the scene with Doc, the phone call to Sekto, the one where Stranger is captured by the outlaws and the finale) with the real-time scenes. Those ones happen when the controls are taken away from you and you watch the scene playing out but it's still in-game and in-engine.
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Spending as long as I do here, it's easy to forget that Oddworld has actual fans.
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