The problem described isn’t because the biscuit swelled, but because the slot swelled. There was too much space between the biscuit slot and the inserted biscuit. This space was filled with glue, and this imparted moisture into the surrounding wood.

That being said, no, a Domino mortise should not suffer from the same problem because the mortise slot is a much tighter fit to the Domino tenon.

John,
If the problem was primarily due to the biscuit swelling, you would not have a perfect outline of a biscuit telegraphing to the surface. The wood fibers of the surrounding substrate would distort this more. If you still doubt this, soak a biscuit in water, wipe off any excess water, and then insert it into a slot (no glue, but you'll need a hammer). Immediately sand the surface of the wood before any moisture from the biscuit transfers to the substrate, and then examine the results in a few days. You may find a depression, but it will not precisely mimick the outline of the biscuit. The depression, if any, will be much more gradual and bowl shaped.

I am not saying that the biscuit swelling does not contribute to the problem, but it is not the primary problem. It is the excess glue sitting in the slot, and this will be absorbed into the substrate.

Oh, I almost forgot. Since expansion due to moisture is a ratio of the material thickness, the 4 mm thick biscuit does not change very much in thickness compared to the thickness of the substrate.

One of the reasons I have never been interrested in Bisquits is that I have read from several sources that the bisquits do swell.  In a cramped shop such as mine, that translates into problems with assembly as well as problems with swelling as have been mentioned above.  One of the very first comments I recall reading about the dominos was that they do not swell.  And that is one of the reasons for my interrest in the system.
Tinker