If I recall correctly, the art is done with a form of early vector drawing so that they can use one set of assets on all platforms. They're designed to 16 colors but get downsampled for 4-color CGA mode or monochrome mode.
But, yes, it's all a bunch of vector draw/fill commands. The first few AGI games showed that process happening; and, as a little kid having one of their first encounters with a computer, I found it fascinating to watch. Later games drew it in an offscreen buffer and showed it all at once, which looked more "professional" but took away some magic.
Here's a video showing the drawing process: https://www.youtube.com/watch?v=v5DSFvWrNWA. Magic!
EDIT: I had an agent make a guess and it came up with reasonable looking numbers that said an RLE bitmap would be a small handful of times larger. But it also interestingly pointed out that the vector commands encoded priority (i.e., what you can walk behind/through) whereas that'd have to be a second data set for a bitmap approach.