Unfortunately, this trailer means nothing. If you give me a chance to render in-engine an up close of 3x3 meters of land I can go crazy too, and not even on high end hardware. I'll have the highest polycount possible and will only use normal mapping for micro-surface detail.
The volumetrics of the volcano - I can "bake animations" of changing puffs of smoke (kinda shape shifting mesh) + a smart shader that uses Fresnel to calculate the transparency\softness on edges of the effect. It will look great, but it will be basically a loop animation - no interactivity, no "actual" particle effects, especially at the distance we see in the trailer. (think of sails on ships at the beginning in "Ryse - Son of Rome", but for smoke)
As for LOD - there are some techniques that could potentially be used to make the lod transitions virtually impossible to see. An example - at a certain distance a heavily tessellated (high-poly) rock replaces the original low-poly rock, but the overall geometry volume stays the same (lots of polygons that basically still represent the flat surface of the low-poly original), and then this new high-poly rock rocks morphs into a morph target of a high-poly rock (looks like it gradually changes its form, "moves" into a new shape). If this is done at a considerable distance - it's impossible to see.
So, at least to me, such trailers mean literally nothing, even if "real time", even if "in-engine". There are so many ways to cheat in a certain scenario in graphics, it's crazy. So, it could realistically represent nothing, only represent the in-engine cutscenes, represent the gameplay, represent the gameplay partically, etc. Only time will tell.
