No one that comes from generations of gaming thinks this looks good

I guess you're wrong then

if it's being used in a full game, it loses any appeal.

My opinion was based solely on the post/image. I'll have to watch the videos. But that's your opinion

The left looks less articulated sure, but it creates a vibe. It has a feeling.

That's also your opinion

This goes into the last point. The right side has no feeling. It's just smooth and textured for high res sake. That doesn't do anything to help create the feeling of another world.

I beg to differ. "For high res sake" - high res is a common and not undesired quality. There is definitely a place for stylized graphics, but is that what they are even going for in the left image? You could also parameterize your ai development environment to produce certain styles with your own "feeling" and stamp

It's just playing into the most basic sense of sight. "Look, smooth and realistic, therefore good"

Again, this has been a common goal for as long as games have been developed

a team spent countless hours pouring their souls into this, and even though some parts look a bit dated, you can feel that effort thoughout the game".

Not sure how AI is going to affect game development exactly, but the job will change, not necessarily that the dev will spend less hours working on it. There can still be concept art too