Thank you! You're right, I do use 3D software. I use Blender.
The original game's assets were mostly made by rendering 2D images from 3D models. Some years back I set up a Blender camera and render output setup that would spit me out images that match the original ZT ones at the correct unit scale; others have done similar and have made batch scripts for Blender that let them do conversions of ZT2 animals.
Under the hood, this is what the sunken boat tank looks like:
Working in 3D opens up a whole world of options that wouldn't be possible to achieve in 2D, although I still use Photoshop plenty. I'm working on a path set right now for example where the assets were built and rendered in Blender but finished in Photoshop to make sure they're pixel-correct and to adjust small details or clean up any edges that don't render perfectly right out of the gate.
I model myself, I also grab models from other places online. The sunken motorboat here is actually a 3D scan of a real sunken motorboat off the coast of Vermont that was created using photogrammetry by a diver who took the photos, converted them into a textured model, then uploaded the model online for free. I'm making lots of use of freely available photo-scanned 3D models for this upcoming aquarium set project. The catfish and turtles are models from Animal Crossing: New Horizons, of all things.