It's sometimes used for the interior of walls between rooms when a room has been added on; in that case the wall between the rooms is usually a sandwich of sheetrock//studs//particle board or plywood//studs//sheetrock. It is also often used as an underlayment on garage walls because it makes the wall strong for hanging things. Europeans call it MDF (medium density fiberboard). You really can't paint it, or even properly wallpaper over it -- it is so absorbent that it will show through.
This is nothing like dry wall/sheetrock, which is gypsum pressed between layers of water-resistant paper. These types of products are made of wood chips/fibers mixed with polymers and then pressed together under enormous pressure and high heat. They are quite strong, but also absorbent, so it is a bad idea to use them extensively anywhere where it is likely to be damp. (The best thing to use for wallboard in a damp area is cement board.)
What you are looking at is an unfinished room. If you want to bid on the house, either require the seller to finish it in drywall and prime it as a condition of the sale, or add in money to finish it yourself. (Note that the boxes of the electrical outlets and light switches have to be extended when you do this; otherwise they will be recessed in the walls.)