Square Enix has reiterated that yes, Final Fantasy 7 Remake is still episodic in nature.
Final Fantasy 7 Remake was re-revealed during Sony's State of Play yesterday, but information on release plans was not provided.
When the game was announced in 2015, Square said it would be expanded and broken into multiple full game episodes.
This was re-confirmed on the official Japanese website.
"[The game] will be reworked as a separate work, with many of the contents being reviewed when performing a full remake."
As RPGsite notes, episodic in this instance isn't comparable to a game such as Life is Strange. Instead, again, Square Enix will split the content across multiple, full-price games. In other words, expect each to be its own, full game release.
More information on how it will be spread out and the contents of each release will be provided at a later date.