Second, Mortal Kombat/injustice managed to be seamless.
True, although it's a lot easier to do seamless transitions when it comes to 2d fighters. Then again, you don't get to see your alternate character costumes carry forward into the cutscenes.
But besides the fact that rendering so much detail into Drake's face would net literally no improvement for the player since we don't ever see an extreme close-up of his face during gameplay.
Which is why we have LOD transitions for when a character or object is near or farther away from the camera. Although, given that the camera always follows Drake, his would have to be the most consistently detailed model in the game. Some games feature real-time pupil dilation (including ND's The Last of Us) for when your character interacts with brighter light sources, which might seem like a waste of resources to you, but it's just one of the many things that can play a role in making a game world and its characters more believable. At 1080p or higher resolutions, it's easier to make out finer detail without the need for an extreme close-up, especially if you're playing on a 40+ inch screen.
That is assuming that the game and real-time cutscenes are at visual parity, which in itself would be ridiculous.
This is a good point, but it all depends on the kind of visual compromises made when moving from cutscene to gamepaly. For example, in the case of Infamous: Second Son, there's little to distinguish between cutscene and gameplay (a fact made all the more apparent thanks to the game's photo mode), save for some heavy use of depth of field. If the compromises are smart, the drop in quality is far less apparent.
FF games also us in-engine cutscenes, but they are rendered on a big render farm.
There are two kinds of cutscenes in FF games - 1. CG, 2. Real-time
The CG ones will depict your characters wearing their original outfits and wielding their default weapons, while the real-time ones will show them wearing attire and carrying weapons that you have assigned them etc.