It does indeed still work that way! We even still support the old, in-house VM, known as LSO2: https://wiki.secondlife.com/wiki/LSO

We're hard at work adding Luau (https://luau.org) as a supported language for both in-world scripting as well as client/viewer-side scripting. As a handy byproduct of that, LSL will also gain the ability to be compiled to Luau bytecode, allowing us to eventually (someday, at least) shed any need for our custom-patched version of Mono 2.6. More juicy details here: https://wiki.secondlife.com/wiki/Lua_FAQ

Source: I work at Linden Lab. If these sorts of things excite anyone, we're hiring! https://lindenlab.com/careers