Hey Phil…I’ve done this before and yes you are correct. It involves cutting out the elements in the photo which mainly would be the characters and extracting them from the background. After that you would have to clone the cutouts in the background but keeping in mind that you would want the cutout character to mostly cover any messy smudges from cloning. After preparing the layers, in After Effects be sure to give each character its own separate Z depth in position after enabling the 3D layer.It gives it that nice 3d look you see here.
It would also help if you would add a camera to the scene with depth of field option enabled.
Best of luck.