If you really can't see the difference between Titan Quest and Skyrim you are not arguing in good faith.
If you really can't see what the mechanic is being used for, you're not arguing in good faith.
Skyrim is an ARPG that utilizes day/night cycle to provide some actual mechanics to the game. Titan Quest is an ARPG that utilizes day/night cycle for literally nothing.
You can cry all you like about how the games are different... But it's all just mechanics. Yes, there are some differences in some mechanics, but it's not like they're incomparable.
It's also not like Titan Quest's isometric viewpoint and focus on random loot necessitates it having a useless day/night cycle. It could still have NPC's change, could still have enemy spawns differ, could still have some level of immersion. It just doesn't.
I've played isometric ARPG's that actually do utilize day/night cycles for aforementioned mechanics.
For example, Ravenswatch is an isometric ARPG that has day/night cycles. With it being tied to the overall mechanics of the game (It being similar to Nightreign in that you go do things on a map and then after a certain amount of time you have to fight a boss and proceed to the next area), but night time also alters enemies, both what enemies that appear as well as enemy movesets. It also can alter your own skills, several characters have alterations to skills based on day/night (Most notably the Werewolf character who's human during the day and werewolf during the night. But also the Pied Piper character has his attacks change completely based on day/night)
Meanwhile, I've played first person ARPG's that don't do anything with day/night cycles. For example, Cyberpunk 2077 doesn't change NPC's at all based on day/night. Enemies don't change. There's no immersion from having to actually rest or anything. It's just there for "Look how pretty the city is at night" and that's it.
Genre, or specific viewpoint within a genre means abosultely nothing in regards to this "Argument"
It all comes down to "How it is used". When used properly and tied to other mechanics, day/night cycles can be actually interesting and add to the game. When used poorly and implemented in a very bare-bones way with no additional mechanics, it's just visual fluff where you're lucky if it actually has any visual appeal inherent to it.
Simply day/night cycles on their own, are not in of themselves an interesting mechanic. As all it encompasses is the screen becoming dark every now and then. That's it, that's all the base mechanic for day/night is. Screen going dark.
It's only when it is combined with other mechanics, like lighting systems to make it visually appealing, changes to NPC behaviours based around time, alterations to enemies (Enemy types, enemy density, enemy behaviours etc), some sort of fatigue or other such "Survival" mechanics (Like a temperature mechanic where you become cold at night) etc. Does the concept of "Day/night cycles" actually become interesting.
But as mentioned, these are not defacto aspects of the mechanic. Many games don't include them and just put in the base mechanic of "Screen goes dark". This goes for many genres of games, from CRPG, ARPG, FPS, MMO, JRPG, Walking Simulators, Puzzle games...
Many different genres have utilized day/night cycles. Some, it works well as it's complemented by other associated mechanics. Others, its useless fluff that just makes the game unpleasant to play.
If you cannot see this incredibly basic concept of how game mechanics function, then there's something to wonder about whether you're capable of understanding the "Argument" in question.