Very likely decals, yes. We have some info on our wiki. http://wiki.polycount.com/wiki/Decal http://wiki.polycount.com/wiki/MultiTexture#Modulation_Blending
See the artdump (with lots of links to portfolios!), and try out deferred decals in Unreal. https://polycount.com/discussion/168674/the-division-artdump-imageheavy/p1 https://docs.unrealengine.com/en-US/Resources/ContentExamples/Decals/1_1/index.html