The transistors can be saturated switches, or non-saturated linear elements. It all depends on how they are biased.
In this circuit, under normal operating conditions, they are biased to work in linear mode. This means that they are all hovering on the edge of being turned on. *
This is why the output voltage can be regulated. If the transistors were used as switches, the output voltage would be either zero, or a little less than the voltage at C1.
* Q3 is biased off unless the circuit is in current limit mode.