Yes. When the system boots from the DVD, you go to the Install. The desktop is not involved. Consider booting from the DVD with a brand new empty hard drive - no Windows Desktop exists. The bootable DVD presents the installer. Then if you boot the DVD on a system with Windows installed, the installer notices and offers the Install/Repair options.
So a DVD that does this is bootable.
I've never used the Microsoft Download Tool, but I suspect it is just a dedicated utility mainly intended for creating a bootable USB installer, but it also works with DVDs in case someone is unsure how to use the ISO to create a bootable DVD with whatever burning application their system has.

