The game, put simply: is NOT cel shaded. Look at the majority of the textures! They may be simpler than common things nowadays, but instead of doing it to be chic, a la jet set; its to express a childish simplicity, and when things get more complicated and adult in the game (example: place where you get the second variation of sword) the textures up in complexity.
Pay attention, it's not cel shaded, just pretty.
Although it is fair, because early shots were cel-shaded.