It is, yes, at least the first season. They spliced together existing footage with some minor edits as necessary (e.g. lipsyncing, position edits) and dubbed it to make something new. That kept the show cheap since the animation costs were almost nothing.

It wasn't the only Cartoon Network/Adult Swim series to use that approach either: Space Ghost Coast-to-Coast used a lot of recycled animation from the original Space Ghost, though mostly in the form of individual characters edited over/into new backgrounds and animations (e.g. the set of the show).

This is based on what I remember from DVD extras I probably haven't seen in close to 20 years so some details might be off. For the most part they reused the Sealab 2020 animations but not the full episodes. Since 2020 was animated on cells, the mouth movements were most likely on their own layers, so 2021 could lip sync to their own lines.

As 2021 went on they did add more of their own animation. I remember someone involved mentioning in early episodes if a character needed to turn around they'd just flip the cells without having any frames in between. Later on they were able to make the frames of the character rotating to make it look more natural.