Yes, it is based on the 7mm, but factory loaded cartridges have an overall length meant for short magazines. The heaviest bullet commonly found is 120 grains, not the 175 grains of a heavy 7mm slug.

All Remington 700 and 722 rifles in 257 Roberts were built on the short action, BTW. So it is sort of the norm. Often, custom 257 rifles are built using long actions so that the cartridge can be hand loaded to a longer overall length, making for a bit more powder capacity, but factory rounds are short.