The theory is simple, you set your poses up as you would in any cycle, and you use JS to transition each point between one frame and the other. It’s a bit intensive for JS (wouldn’t reccomend making a game with it in your browser but its possible).
Think of SVG as a web ready vector art that you can also use as a backup to save on file size. (Because it’s a few lines of text and not an infinite string of bytes you can’t read).
All that said. If you think about it the Persona/animation system would already have all the required math and functions to make this happen if it were just re-coded and adapted to vector art… that’s probably why it is used a lot and why you make blender rigs. It’s a quick cheat to tie into an existing implementation (and it let’s you also use the common animation nodes without having to touch anything in engine).
And yes, the oldschool method is just that. You just split your character up in parts, create a few extras too in case you need the toes to articulate for instance. You actually parent them in a very similar hierarchy as you would create a skeleton.
Pelvis > upper leg > knee > lower leg > ankle > foot > toes.
Torso > shoulder > upper arm > elbow> lower arm > wrist > hand > thumb & fingers.
Head > eyes, nose, mouth ears.
When you move stuff around the “in between” parts usually get adjusted to fit. (Shoulder, Knees, elbow, ankle, wrist).
After assembly you would export to PNG with transparency at whatever target size you needed (in a world aligned file size so that you would have the images flickering around).
You could imagine this as taking the files over to photoshop and publishing an animated GIF of the cycle. It’s sort of similar in anything I used at the time.
The alternative for 2d was Flash at the time. You would just move the vector art to flash and use flash to animate the cycles and parts directly. Realistically a whole different sort of story.
As far as modern pipelines go (specific to UE4). I would really look into using straight up SVG. To the point I would consider rewriting the whole thing using the persona system as the base to manipulate groups of SVG points in 2d space.
The engine is really good at moving vectors and incredibly fast on those calcs. But it doesnt (afaik mind you) support a straight up usage without workarounds…