I haven't modded very recently(it's been about a year) but animation quality has improved alot last time I checked. The only issue is that the sex anims seem to be bottle-necked by Lover's Lab/Sexlab. They're still using FNIS for installing animations when when more mod authors have been switching over to and expanding upon Nemesis and such. Even so, if it were five years ago I'd say modded Skyrim is probably the "best AAA hentai game."I've played that but the quality is really low of the animations and general gameplay at least when I gave it a go a few years ago
Something as polished as Wild Life still has the same issues with transitioning characters into and out of interaction animations. It's to the point that they just use cuts and cinematic camera angles to cover it rather than find a way to make the transitions look natural. Sure, in Wild Life the animations themselves are more polished and look nicer but with mods like OStim/OSex/O"Whatever" Skyrim is quickly closing that gap.
I really want Hentai games demonstrate their value to the medium and I think the way to do it is to really innovate on how games are animated. Otherwise they'll stay as, in the worst case: any other game but with porn tacked on or best case: A niche that explicitly explores subject matter to it's logical extremes.
I'm okay with where we're at, don't get me wrong. I'm sure a few of us have played something like Soul Calibur or Bloodstained and thought "wouldn't it be nice if..." I just want this niche to have something innovative to offer to the medium as a whole. Less "we wanna be like the big boiz" and more "we want to do something cool and unique" or "Let's focus on these few important things and do them better than anyone." When aiming for "AAA Quality" is the goal, then not only are AAA publishers stagnating "just" the industry specifically, but the medium as a whole.