it's neither. The rotating blades mode is an unsteady, time accurate model that treats the blades as their own panel or VLM surfaces with wakes. Think of it just like a wing in VLM mode that's rotating through the flow field. Locally, the blade experiences its own velocity and produces lift in the thrust direction and drags in the torque direction.
BEMT is more about discretizing the local blade sections (twist, chord, etc) into slices that each impart some additional momentum to the flow. Corrections to this model relating rotor inflow, tip losses (Prandtl tip loss factor), viscous approximation, rotor solidity, etc. are all accounted for at varying fidelities depending on the implementation. For more on this subject, I highly recommend Leishmann's text, "Principles of Helicopter Aerodynamics".