CoC2 and Lilith's Throne both have completely opposite problems when it comes to this issue in particular. COC2 Devs are way too obsessive with the balance of the game. They refuse to allow Roleplay to affect Gameplay, making any form of in game options that involve roleplay options like transformatives, virginity and anything similar non-existent, which ends up making said roleplay options dull, boring and in some cases redundant.
Lilith's Throne however allows these roleplay options to have great effect on the story - even having special races that grant the PC massive benefits such as becoming a demon for example. And though I VASTLY prefer LT's system, it has a MASSIVE problem in the simple fact of how ridiculously easy it is to become broken to shit with the right TFs and options. Seriously, that game is sitting on paper bricks with how easy it is to break, and that's JUST regarding TFs.
TBH I think the original CoC did an pretty good job with it. It gave you special powers but it didn't break the game and even allows you to turn those powers permanent upon a New Game+, which actually gives the player incentive to try a new race every run instead of running the same optimized build over and over again. The TFs themselves were powerful, but not so overpowered that you necessarily needed them to beat the game. And it gave the PC a bunch of options in various scenes including sex scenes giving WAY bigger room for roleplay than COC2.
I disagree with the CoC2 Devs' philosophy, but LT is a good example as to why it should still at least be semi-balanced so you don't end up breaking everything.