This. It depends on the game and the devs, but one of the big reasons is definitely file size. And honestly? The quality difference between modern in-game graphics and a prerendered cutscene are generally not significant enough to care about it. Like in FF7 Remake, for instance. There was maybe 2 or 3 actual prerendered cutscenes and everything else was rendered in-engine, and honestly? While I could see a definite difference, I actually thought the prerendered cutscenes were kinda...plasticy. The difference in the characters' appearance vs their in-game models was way too jarring, and the cutscene versions were softer and uncanny valley to the extreme.
Compared to OG FF7, where you spent most of the game looking at character models that looked like they'd been built out of carboard boxes, I think it's perfectly fine to render the cutscenes in-engine instead of having these bloated game files that consist largely of 4K prerendered cutscenes that are only marginally prettier than the in-game graphics already are.
And in the meantime, artists like Hydra can take those already good looking models, add the naked bodies, and make beautiful porn for us all to enjoy. I mean, I'm old enough to remember when the only "official" Aerith model we had was the lowres Crisis Core model, and now we have all of the FF7 girls, including Cissnei, and guys like Hydra and Nagoo can make animations with character models that don't have square fingers or triangular vaginas. At least in that regard, I think we're living in some pretty blessed times.
