I honestly can't figure why 3Impact always "emulates" multitexturing when practically every video card out there is capable of multitexturing at the hardware level.
As I said, I think it's just a question of the crappy artpath. They're not loading a second UV channel, so they can't multitexture with different texture coordinates. Of course, it would be trivial to code it such that you load the second mesh and transfer UV coordinates to the first mesh in code, but they evidently can't be bothered when they can fob people off with a load of old pony about vertex buffers.