The worst D/N cycle is just cosmetic... the best gives a game many opportunities to become way more interresting, consistent and enjoyable for everyone.
Sure, but they’ve said that a proper day/night cycle messes up other things they are doing. Things that should be interesting and enjoyable for everyone. Maybe more so than a day/night cycle?
A cosmetic day/night cycle might be OK just to change the environments, but that could conflict with the whole resting thing. In which case, maybe a weather system would basically do the same job?
Most games’ lighting at night is more perpetual twilight anyway, or a very bright full moon at best. I could make a case that exploring anywhere without artificial lighting in the middle of the night totally breaks my immersions, unless my character has the ability to see in the dark. But that would be nitpicking.