Hmm, maybe it's because I played a "certain" version of the game (before buying the goty version) I didn't encounter momentary pauses much if any. I do remember it chugging on ultra pretty hard, but I was on my 1060 back then.
Yeah now you mention it, I did have the same thought about the textures being "just photos".
You are correct about the scanned nature of things, I remember seeing some video about them using that tech. A lot of the vegetation was simplified down to the usual 2d sprites to save on poly count as it would have been absurd to use 3D scans. The shaders felt a bit primitive yes, with sprites it's not that easy to get em to look 3D while keeping them realistically matt. I think with the shear amount of vegetation and stuff on screen they just opted for a simple fast shader that delivered okay results and that affected most other things as well. Anyways, it didn't bother me as much as most "99999K hyper super realistic retexture packs" that ruin the consistent look of the world...
I would love to see how those assets would look in full 3D scanned form, with the power of the new Unreal engine micropolygon thingy, this could be doable today!