Does it? That depends on whether the control sequences are being encoded as UTF-8, or transmitted literally in between UTF-8 characters.
If they are being encoded, this is still useful. Though space isn't saved, any ambiguity between the control bytes and UTF-8 bytes is eliminated. The advantage is still present that CSI is different from ESC, and so in the terminal->host direction, you don't have the ambiguity between ESC as a UI command character versus control sequence signal byte.
If they are being encoded, this is still useful. Though space isn't saved, any ambiguity between the control bytes and UTF-8 bytes is eliminated. The advantage is still present that CSI is different from ESC, and so in the terminal->host direction, you don't have the ambiguity between ESC as a UI command character versus control sequence signal byte.