That's what's in the majority of them and it's a crapshoot if the wheel is usable without needing to run tire sealant or apply a liquid bead sealer.
It's just about always going to be more than just replacing the tire, and there's no way a tire shop will do much more than scrape off the chunks and put another tire on, if they don't refuse to mount a tire on it to start with, because they don't want the hassle of chasing leaks.
This is what you get with those old, dry rotted tires, where someone put who knows what type of sealer in it, and they still won't hold air now. An FYI when paying top dollar for some crusty trike. It's going to cost you more; possibly new wheels.
I was able to use these another round after some washing, wire brushing, and rust converting paint. I used to put wheels like this in the blasting cabinet, prime, then paint, but that's realistically too much work and money on a rust pitted wheel that may still require a sealer for the tire bead. Now I just go this route.
This Rustoleum doesn't list it in the directions, but other spray rust converters I've use say it works best with a light amount of surface rust, after all the major stuff is gone. That's the reason for not wire brushing it down to shinny metal, or at least spray it with some water afterwards to get a thin coat of flash rusting.