MSFS implements optimizations on top of that (progressive detail, compression, etc), but that’s how almost all map systems work under the hood. It’s actually an efficient way to represent real environments where you don’t have the luxury of procedural generation.
A highly compressed, global base map at 1m resolution is somewhere on the order of 10TB. MSFS is probably using higher resolution commercial imagery, and that’s just the basemap textures, most of which you’ll never see.