There’s about 5% truth to it but 95% people just do it simply because they have absolutely no clue what they’re doing.
The “realism is not always the intended outcome” is a weak argument which immediately falls apart when you realize that most breakthroughs in the area of physically based (again, notice the word physically) rendering have come from Pixar. Yes, the same Pixar which does all the rubbery, cartoony animated movies.
They’ve realized very early on not only that breaking rules of physically based light transport does not add much quality or artistic control to even stylized scenes, but it actually takes away from it. Unnatural, crappy lighting hurts stylized content as much as it hurts the photoreal one. Then of course, there’s some subset of heavily stylized content like anime style cel shading so on. But if you are researching things like SSGI and RTAO, you are way too far, far away from that land anyway.
And yes, SSGI is not sufficient to define contrast between surface alone, when we are talking about fully dynamic scenes. Even the documentation states so:
But it’s also not supposed to be combined with AO. That’s why it actually overrides/disables SSAO, and the fact that it doesn’t happened with RTAO is more of a bug than a feature.
Here’s a video showcasing that assuming your albedo values are reasonable, SSGI alone can provide a nice, realistic indirect shadowing for open exterior scenes (ignore the blueprint tinkering at the end). For interior spaces, you will need more accurate skylight occlusion. In this case, ray traced skylight is the best thing to combine with SSGI, as it provides more accurate and realistic skylight illumination/occlusion than just RTAO. But yes, it is costly.
If you still don’t believe me, here are some example of my, at this time rather older work:
And that’s just personal stuff.
I do have some clue of what I am talking about, given that I spent about 9 years doing offline rendered CG before I started using UE4.