Nah, LOTR is not worse off due to lack of sex in it because it is an artistically elevated masterpiece with a completely different portrayal goal of fantasy, so naturally sex would not fit in it.
But for something like Game Of Thrones, which is trying to illustrate the raw, real and brutal medieval atmosphere... yes the exclusion of sex would very much change the atmosphere of the show and what it's trying to portray. The way sex is conducted in the show by various characters and cultures, has a tremendous amount of meaning and perception. It makes it far more real and gritty seeing how something that is a symbol of love can be so hideously misused and portrayed by certain characters.
So it depends on what an art is trying to portray. BG3 clearly is trying to display the gritty real world of Faerun without sugarcoating it. The very first teaser for the game has the Flaming Fist knight go through ceremorphosis. So to me it very much fits into the narrative and enhances it, rather than makes it worse.
