The earnings would still be tax-free until withdrawn whether you roll the funds into an IRA or leave them in the 401(k).
But yeah, otherwise, it seems likely that the money put in a Roth was just the contributions, not the earnings, since you need to pay taxes on the earnings. Interesting that it got put into a Roth IRA - basically that let you bypass the Roth IRA limits for whatever year you earned the money.
Interesting article today on Washington Post, about people doing something like what @Broomstick plans (living in a multi-person household with roommates). They use the term “Boommates”: