I didn't watch the video, but the journalists reviewing the game were given weapons that were temporarily made more damaging/explosive than those weapons normally are when users eventually play the game (I don't know if they mentioned that in the video, but it was in a news article a few months back). This means it'll take alot alot alot more work for players to collapse a skyscraper, which means not as much content will be

Below is my speculation:

Objects don't need to be sent "every frame" even in regular networked games. Even if their positions and velocities are sent just once a second or less, you can still predict (based off their previous positions and velocities) where they will be going. With real-life players, a player can turn and walk in a different direction, so you need to send the real position and velocity much more frequently, but with a rock flying through the air, it's not going to change direction suddenly. Objects in the distance need to be updated from the server even less frequently.

Once the rocks land, they don't need to be updated anymore unless the player starts interacting with them again. Rocks don't move on their own. So once a building settles, and a player is a few hundred feet away, the server doesn't need to do any more calculations on it, just store the positions, and only kick up some more physics calculations when the player starts interacting again. The farther the player gets from the building, the more the server can put the complicated parts of the simulation in deep freeze.