I'd say this isn't the norm. Some of my colleagues who've been funded this way only got the money since they were unable to get other scholarships at the time. So their supervisor managed to scrape enough together to 'hire' them.
This has downsides since the student is effectively an employee of the lab. I've seen examples where conflict arose between what the lab needed from it's RA and what the student needed in order to progress with research work.
Things could well have changed - my experience was in the late 80's and 90's. Of the people I knew RAs usually took a bit longer to get their PhDs than full time students - say 4 years rather than 3. However, the prof running the lab I was in was pretty good about giving RAs time to do their thesis while getting paid from a project.