Even in landscapes is widely not used in production due to it’s cost. UE users love it because it’s a low effort way to make their landscape look detailed without the compromises that a real shipped product would have to make.
While I know there are some use cases that aren’t fully covered by alternatives, it’s definitely blown away out of proportion.
Half of gamers probably can’t even tell the difference between POM and tesselation.
Many studios have wanted to ship their games (UE or not) with tesselation, but had to cut it for performance reasons, get creative and find an alternative.
Hopefully Nanite landscapes - which we know they’re exploring - finally give us the no compromise detail we all want.
Regarding characters… Static LODs look just fine. Try to find a pointy polygon on Kratos in the new God of War, for example.
Exceptionally few games every shipped with character tesselation. I think one of the Hitman games did, because it smoothed out Agent’s forehead a bit. But it’d probably have been better just to have another LOD instead.
Water is a true loss, and one of the better applications for tesselation. But with Nanite support for WPO growing maybe that won’t be missed for long.
Procedural meshes are another area that suffered, but geometry scripting is thankfully bringing some of that back power. This is probably the most niche case, though.