Yes, they used 3D models to create the sprites, but they didn't use the 3D models in the game, they used the sprites created from the 3D models. The difference between the two is that sprites, you have to create different sprites for each frame of animation, and if there's a lot of animations in a game, the filesize of these sprites would be fucking huge; while with 3D game animation, you don't have to have a different 3D model for each frame of animation, resulting in far smaller ammounts of space being taken up by animation.