I actually hope that FFXVI uses Unreal, I don't think that UE4 has affected them creatively in the slightest, I mean KH3's graphics look like what you would find in a current gen Kingdom Hearts title, and the FF7 Remake it looks fine a bit of graphic polish needed, but honestly if the game runs fine, and plays good then they can through Luminous Engine in the trash can and forget it ever existed. I honestly don't see how it affected them creatively, hell FFXV shows the opposite, the game had time constraint issues, hell that's probably why you have fully made things in the game with collision, hell some even with enemies in them which is insane.
If Final Fantasy XVI is an Unreal Engine 4 game or better yet an Unreal Engine 5 game, I wouldn't care, if the boss fights are great, fun and has some challenge to it, the combat is full of depth, and plays like amazing(I'm hoping for an action RPG), a story without holes, full of life, complexities, depth, and is fleshed out? then I don't give a shit, and graphics comparable to the FF7 Remake? Then I don't give a shit. I'd rather have a game with all this than one that looks pretty and fails on some of these levels. FFXVI will most likely appear on Steam anyway, so the graphics are modable. story, and gameplay however are not. Also for the consoles I'd rather have a game that takes a slight dip in graphical quality, and run at a locked, and constant 30FPS, than one that has bad framepacing issues, with a FPS that goes from 24-30FPS. It would also allow them to work on multiple mainlines at a time, or at least multiple games at a time.
If you don't think there's a problem with the way KHIII and FFVIIR look, there's no way I'm going to convince you that UE4 is a problem. Suffice it to say, I
do think there's a problem with the way they look. I think KHIII's graphics only "look like what you would find in a current gen Kingdom Hearts title" insofar as there's nothing current-gen to compare it to outside of itself; the character models in particular look poly-starved, more in line with (first-party) Wii U games than Squenix's PS4 output. And both KHIII and FFVIIR, unfortunately, suffer from "stock UE4 syndrome," which makes them feel more like amateur UE4 remake projects than full-priced Squenix games ever should.
In other words, modding is a terrible solution in this particular case, because the crux of the problem is that it looks like a fan mod in the first place. =P
As common as it is to pretend that trade-offs must inevitably be made between graphics, story, and gameplay, that's not meaningfully true. Different people tend to work on those elements of a game, and if one is bad, reducing one of the other two is unlikely to improve it. Reducing the graphics wouldn't make a game with a bad story and/or bad gameplay better. It'd just result in a game with bad story, bad gameplay,
and bad graphics. =P
As for frame rate and frame pacing, UE4 didn't really do much for KH 0.2 in that regard, so I'm not sure why you're assuming that it'll give you what you're looking for.
DigitalFoundry's analysis shows that it's got the exact same sort of frame rate/frame pacing issues as FFXV does in spite of the big dip in graphical quality... and it's handling fewer hero characters on screen than KHIII will need to handle.
Even working on multiple titles simultaneously isn't UE4 specific. Squenix is structured such that there will always be multiple teams; the only thing that needs to be done to allow for multiple teams working on Luminous titles is for the Luminous team to be freed up to train/support them.
Yeah, to say jumping from Luminous to UE4 "hurt them creatively" is a pretty bold statement to make given the only things to go off of is FFXV (which is a special case), and some screenshots of KH3 and VII remake.
FFXV isn't the only point of reference we have for Luminous. FFXIV uses a branch (optimized for many character models and lower base hardware), and while its graphical performance isn't anywhere close to FFXV's, it steers just as far clear of the stock UE4 look as FFXV does. The Luminous tech demos -- Agni's Philosophy and Cry -- might not be full games, but they demonstrate the same "scaled-down VisualWorks" look as FFXV itself.
As for KHIII and VIIR, we might not have other Square-part-of-Squenix UE4 games to include in a comparison, but we don't really need to, because it's obvious on even a cursory look that most of those games' issues are shared with UE4 games that use the stock settings (like all those fan-made "HD remake" projects out there).