The cutscenes were rendered using certain graphics settings that you could exceed if you maxed out your own settings. Plus, because it was a pre-rendered video, there must have been some compression or something, as you could just tell when you're in a cutscene-- it was grainier and there was a smidge of artifacting. Don't quote me on this, but I believe the cutscenes were rendered at, like, 1080p, and if you were playing at 4K it would be a very noticeable downgrade. (Note that I did not and still do not have a 4K monitor)

Although thinking about it again, I do vividly remember some in-game-engine cutscenes in Arkham Knight. I'll have to replay that game again sometime to jog my memory.