No, no they do not. I've worked for the government and in that sector. We did not print code to review it. That might've been a thing a decade or two ago, but it is not a thing now and for good reason. And I would strongly question the technical capabilities of a team that was not able to adapt to modern tools even for older codebases. What exactly is your citation that they still do that?
It is simply much quicker and much more efficient to do something like a proper code share in an office with one person driving the code and being able to jump between areas of the code.
To say it bluntly: Anyone that uses printed code for code reviews is wrong. It assumes all functionality is colocated and nearby. It wastes time by forcing people to index through multiple pages of paper. Anyone that demands it should see prompt pushback.