Tymnet collected segments of the streams in circuits and sent them over a link from one node to the next in packets, several segments per packet. Packets were error controlled between nodes. Here is an e-mail note by Laroy Tymes that he sent in response to a question I sent him in late 2003 regarding Tymnet flow control.
Each virtual circuit that ran between 2 nodes was represented by a channel between those 2 nodes. Every half second a bit vector was sent from the receiver back to the transmitter. A 1 bit reset the flow control counter for the corresponding channel (30 for low speed circuits and 120 for high speed circuits). When the transmitter sent data on a particular channel, the counter was reduced by the number of bytes. When the number reached 0, traffic on that channel stopped until a 1 bit from the backpressure vector reset the counter.
Several more ambitious schemes were considered, including “blaster” mode which dedicated whole packets for certain high data rate circuits, but they were never implemented.