Games can be pretty late in development and not look very good, when you see gameplay demos and whatnot in development games is almost always snowflake examples that they bring up to a "gold" standard just for the demo, which is often why they can drastically change prior to release (see halo 2). From the footage of this I've seen it was footage recorded from someone in some QA capacity role trying to show an issue to a developer, so it was absolutely one of the most in development looks you could possibly have, any visuals were essentially fluff at that level of development. They probably have a pretty good idea of what the finished product will look like, but there's really no reason to put that into a version of the game that's just testing AI.