I don’t think there’s anything stopping modern games from having the same vibes, and being creative with graphics. I’d say one example of a modern game with high res graphics, realistic water, and even ray tracing, which still looks very unique and distinct is Paradise Killer. Another one that also looks quite modern in some ways while still being very distinct in its own way, is Heaven’s Vault. It’s a choice made by AAA studios because photorealistic visuals tend to attract more eyes and sell better, even if people get bored of the game quite quickly.

And the thing is, AC Unity - which came out in 2024 - still looks better than the majority of AAA games I see nowadays, and despite the large crowds which are a bit CPU demanding it still has much lower requirements than those games that look worse.

EDIT: And if you just want games that actually look retro and old school, there are some from indie devs doing that; examples include: Dread Delusion, The Case of the Golden Idol, Death Trash, Felvidek, Return of the Obra Dinn.