Yeah this is an in-kind transfer. VG will set you up with a brokerage account and run through your holdings to make sure they can all come over. The in-kind transfer does not incur any kind of tax, as no transaction is going to take place.
I am going to push back a little on the VG customer-service love though. I initiated a transfer in January and it wasn't done until March. I was with a major brokerage company and the process was supposed to take 5 business days. It took significantly longer, which is something I've found with Vanguard. For buy-and-hold investors, this isn't really a big deal. But don't expect immediate order execution or fund transfers, stuff takes 2-3 days that other firms would get done in 1-2.
Maybe my experience was an outlier, but that's my experience.