I doubt you mean that - if it was interrupt driven, there would have been some CPU time available for other tasks, but if it simply used software delay loops for the bit timing, it would use 100% CPU time and all other tasks would freeze. That would also account for the rasp as it probably couldn't run with interrupts disabled for long enough to play the sound without crashing the system, so playback would be chopped up by any interrupts.
There were other drivers that tended to use 100% of the CPU time, e.g. floppy access would usually freeze early versions of windows for as long as it took to access each track, making the system nearly non-responsive during a format.