I guess it would be possible to do a sort of a compromise of the two - a concept art like background which is also animated. I suppose this conversation is mixing the ideas of concept art and hand-drawn (or something like that) backgrounds a bit. Concept art is always concept art, a concept of what the whatever-it's-a-concept-of should approximately look like in the game. But you can have backgrounds that are more hand-drawn/painted (or at least have that look). Like Machinarium, as a clear example.
But as far as I've gathered, their plan is to as much as possible give it that hand-painted look instead of 3D-rendered. Of course hand-drawn can also have animation, just look at, well, animations.
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