Well, I don't know Day/night in Pillars of Eternity or other recent games were people say it's <cosmetic> (for my part if something enhances Atmosphere I do not think it can be called <cosmetic>). Being able to dye your hair any colors of the rainbow is way more <cosmetic> than Day/Night. And Larian clearly prioritized that aspect...
SO let us look at a previous Baldur's gate game : Baldur's gate 2 (2000).
-Certain quest lines only came at night.
-Some dialogues and banters quicked in during nightime.
-Only certain creatures or encounters happened at night.
-Some areas available only at night.
-Nightime affected certain skills and items.
Atmosphere or <cosmetics?>
-Obviously graphics. Progressively gets darker/lighter. Cutscene to nightime. Dark and Lights turn on from buildings if in town.
-Some building closes, less NPCs walking around, generated creatures are different.
-Wildlife soundeffects matches the night. Music changes.
-Nightime weather effects are enhanced. (Lightning flash with rain...)
Now thats from a game 22 years ago. Surely this can be expended upon in 2022? Particularly since the (3) in Baldur's gate 3 tells us this is a Baldur's gate game? One of the major Baldur's gate game expectation is to have day/night included I would think. When I think of Baldur's gate (both games) are the contrasting night/day time city graphics! It looked spectacular.
Like ordering Turnips soup but getting served raw turnips with a spicy sauce!
Found this great image in the forum: