"One of the things I enjoy about cutscenes is that it shows how the world progresses without the players being around. The world is not on a pause button until the players arrive and influence events. Would the attack be an awesome scene with the players involved? Absolutely. But you guys chose to be somewhere else at the time, and the battle went on without you. That's not a bad thing, mind you - maybe when you turned left, you were involved in another major part of the story. But I think cutscenes give the world a more living feeling to it. You guys aren't just wandering from place to place doing everything that matters in the game - the world progresses without you. It gives weight to the choices you make too - you realize that maybe if you had chosen something different, you could have changed the outcome."
Your GM sounds like a thoughtful guy who I'd enjoy talking shop with. I'm not sure I fully agree with his reasoning, but his reasoning is coming out of the right place IMO.
In my essay on railroading, I wrote that railroading techniques could be justified when they were used to grant meaningful agency to the player, rather than being used for the reason they were most often used for, which was to take away agency. The use of "cut scenes" was one railroading technique that I discussed in the essay.
What I like about your GM's response is that he clearly is coming at cut scenes from a gaming perspective, and not from a literary perspective. His justification isn't - as it too often is - to show how awesome his NPCs are or how awesome his story is, or even to hook the players into the story. Nor is his justification that running a participatory scene that had the desired outcome would be too hard. Instead, his justification amounts to trying to prove to the players that they actual do have agency, and can make meaningful choices.
Most importantly, he seems to only be using cutscenes to show players events the characters didn't directly participate in, and not to take control of the PC's and remove player control in order to get scenes to work out the way he wants.
When I talked about using a railroading technique to give meaningful agency to the players, it wasn't "cutscenes" that I had in mind, but things like "small world", "hand waves", or "Schrodinger's Map". So it is extremely interesting to see a GM approaching cutscenes as a player empowerment tool. And your GM's explanation fits my theory of when a GM does well by pulling railroading techniques out of the toolbag.
I remain not completely sold on the idea though. For one thing, for this particular case, I don't buy the "you guys chose to be somewhere else at the time" explanation. By your account, the events are happening in a campaign 'Prelude'. Surely the GM controls the backstory sufficiently to ensure that where the PC's begin the story coincides with where the most interesting part of the story is happening. I don't buy the explanation that the story starts in Hillsville, but the GM chooses the most interesting things happening at the time to occur in Forestburg and that that isn't something he controls because the players choose to be in Hillsville. This is a Prelude. The players haven't had opportunity to make meaningful choices yet about where they are at.
Secondly, in the real world we have the sense that things happen in parts of the world we aren't in, and that our choices might have been able to change the outcome. Yet, we have that sense that the world works this way completely without recourse to cut scenes. It seems to me that there are ways to convey the knowledge to the characters without recourse to cut scenes. For example, in my game the PC's knew that a battle was likely to be fought in one area, but instead 'turned left' and explored a different path. I wanted them to know what had happen in the battle, so I had a minstrel show up in the tavern and relate the events of the battle. This 'story within the story' conveyed all the information of a cut scene, but by the conceit of having a minstrel convey the words to the characters, I was able to read a cut scene to the players without breaking the 4th wall. All the same words got read, and it took all the same amount of time, but both the characters and the players now had the same information, so no worry about metagaming, and the scene was interactive at least minimally, in that the players could now ask questions to the NPC about things they were curious about, or critically have their characters make knowledge checks about elements of the story to get more details about it. How can you have characters make knowledge checks to understand a story when you have a cut scene that isn't playing to them? For that matter, in a lengthy campaign featuring many cut scenes, I'd expect players to become confused regarding what they know and what their characters know: "Did we learn that in a cut scene or did it happen to our characters?"
A modern version of this technique would be like having the players see a breaking news report on the TV, a technique you'll also see quite often employed in movies. In general, any story told in the first person tends to have "stories with stories" where the protagonist learns about what has been happening in places they aren't in. Even stories with multiple perspectives will often use "stories within stories" in order to have cliffhangers where the audience is surprised in ways that they would not be had they already had the viewpoint of all the characters. For example, Tolkien repeatedly employs these stories within stories, usually (but admittedly not always) framing flashbacks to create dramatic cliff hangers. Now granted, just because it works in novels or movies isn't necessarily a reason to adopt the technique into gaming, but the structure of an RPG tends to be closer to first person perspective (or multiple viewpoint) than not, so why not adopt techniques like that in preference to cutscenes?