I've seen plenty of people complain about this, but I can't say I've noticed it personally even a little bit. I've been far too absorbed in the game to care about that stuff. Also, my primary console these days is the Switch, so what do I even have to compare it to? The only other PS4 games I've played over the past year have been KH3 and DMC5. Does it look as good as those? Sure, I guess? It definitely doesn't run at 60fps like those games do (on PS4 Pro), which is unfortunate, but not something I was expecting in the first place due to how dense this game is.
Yeah, the days of Square Enix using custom tech are a thing of the past, for better or worse. The final nail in the coffin was when they set up a new studio for the director of FF15 specifically to create games for the Luminous Engine, only to shut it down within a year and kick him out of the company.
KH3, DQ11, FF7R, Trials of Mana... They all use UE4 now. KH3 was the first to announce dropping their own tech in favor of UE4, which gave me quite a scare when they released the BBS 0.2 demo back in 2017. That was probably the ugliest game they've ever released. But, two more years with the engine gave them enough experience to release one of the best-looking games this gen. Still, when you heard them talk about the "Kingdom Shader" and how ambitious that sounded, you can't help but think they could've done even more with their own tech. But then the game still wouldn't have been out right now, so eh.