I suppose in my head I always just figured they did some photo shoots with actors and actresses to get a baseline model for the game's characters, and then the animators took those sprites and made them jump / kick / punch / fall down / do special moves.
I'll admit I don't usually follow fighting games or how they're made (or how they used to be made in the 90s).
It's just how MK (and wannabes that followed) was made. Other games were drawn from scratch for each frame, you can't just move the limbs of a sprite around for movement or it will look like a flash game.
Well, some games do use skeletal animations for 2D sprites like that but they still alternate different sprites for different angles and what not so that it looks better but you can still tell that rather than being hand drawn every frame they just move limbs around, it's a very distinct look that tends to have the wrong perspective a lot of the time. Something like Vanillaware's games. Muramasa, Dragon's Crown etc.
Recent 2D games may use 3D models with key poses/animations and then still draw over them each frame to create 2D sprites with the right look/shading/details.
