I use a solo cup with drain holes and half pearlite with whatever medium I'm using ( hard for me to overwater with all that pearlite ).
I cut in half vertically and tape it back together before I fill it.
That way you can peel the tape and split the cup off really easily. I saw that air pots split like this and was like, hmmm.
You are supposed to transplant so the roots grow out at all levels basically, if you start in a big pot they mostly go down. All those stupid natural outdoor plants, trees and such, doing it wrong
That's one reason why people transplant anyway, another is room.
To specifically answer your question, Yes. I used those dissolvable small planting cups on some stuff for the garden. It wouldn't let the roots through like you would think. I had to dig stuff up and peel the cups away. They were degrading, but not as fast as the roots needed them to. It was outside so I was watering pretty good.