It's really not. The only thing that's not great about those graphics is the characters when they're roaming around and that's really just down to them not being very detailed. Less so than their 2D predecessor ironically. But I don't think they're so bad that they ruin the game. They don't really get in the way of anything in terms of script or story. It just comes down to either liking or being able to look past the super deformed style or not. Not being overly bothered by it doesn't mean people are blinded by find childhood memories. Hell, i don't think anyone would ever accuse me of being blinded by nostalgia when it comes to VII. While i do like the game overall, I've never had an issue dealing it some harsh criticism.