What if it was neo mexico city? Need some cyberpunk chihuahuas

Art direction isn't purely aesthetics either. There's so many things that go into makeing art, be it a game or something else.

Art should help us feel what the artist intended or sometimes something more personal to ourselves. Many aspects will facilitate or detract from that.

You can have stylized photorealism the same as other styles of art. You mght see pixel art of a realistic scene. Or you can have extremely detailed animation.

I think the better question is does the community allow for and reward that expression? Are there trends we don't find too appealing universally? Are there styles of art that maybe seem overused?

The Neverhood literally consists of photographs, it is as photorealistic as it is possible to be, and yet it has a very strong art direction. More modern titles like The Midnight Walk, Keeper, and Felt That Boxing are similar, though they are actually rendered rather than consisting of photographs and video. On the other side of the coin there are some visual effects that are quite abstracted from realo, but are also very GPU intensive, showing that just because an image doesn't look like a photo doesn't mean that its necessarily easy to render (note, that video is a human authored algorithm, not AI, though they do compare it to AI video generation).

I used to have the same opinion that you express, but I think this was only ever really true in practice during the brown era, and not before or after. In fact some games like Thief 1&2, Half Life 1&2, and the Chronicles of Riddick were trying to be as photorealistic as possible at the time of their release, but are now pretty commonly praised for their "stylization" today. For example, the deep blacks and stark contrast of stencil shadows vs what you get with more modern lighting. I am reminded of a Brian Eno quote:

Whatever you now find weird, ugly, uncomfortable and nasty about a new medium will surely become its signature. CD distortion, the jitteriness of digital video, the crap sound of 8-bit - all of these will be cherished and emulated as soon as they can be avoided.

We are even seeing some nostalgia now for the pissfilter era, though that's not an enthusiasm that I share. I suspect that we will eventually see TAA ghosting and ray tracing artifacts, that are currently much hated, be recreated in a controlled way as a stylistic choice. In particular I think that Control will eventually be praised for the way that it basically incorporated ray tracing artifacts into its art style, by using sparkly mineral walls and a dreamlike atmosphere.