Yes, this is a default behaviour of pio remote run -t upload command. The project will be processed on the client side and only the final artifacts will be synchronized with PIO Remote Agent.
If in some case you need to process FULL project on the Agent’s side, then need to use pio remote run -t upload --build-remotely command. This approach is useful when you want to develop for some hardware that doesn’t support cross-platform building. Like, native RPi, BeaglBoard GPIO drives and etc. In this case, you can develop project on host machine and PlatformIO Remote will process it on remote machine and upload/run firmware.