It depends on the developer or artist's creativity. If they can create great renders, I usually don't care about the engine that was used to make them.
Smols DAZ models tend to look a bit like... Gollum. The faces rarely look like real smols because the "shrink function" shrinks the models disproportionately an make them look strange. Many devs try hard but in the end only a few look good.
Also the body itself has it's flaws. Small boobs or flat chest aren't looking like that of their age, but just shrunk adult boobs. Baby fat and a no hip to waist ratio is often missing.
Koikatsu on the other hand have a nice constant face quality and because anime faces already look cute, smols have a good chance to look good.
But they have the same problems with the body (boobs) like DAZ, they are often just a shrunk down version.
Besides that, the default sex animations and positions aren't very engaging.
But I generally reather tend to realistic looking 3D.
Same as others have said, I like them both. What I don't like is koikatsu based games tend to get really big really fast and I hate having to repeatedly download a 3+GB game every time a new update comes out.
DAZ or HS2, or whatever newer ones are being used now. I prefer a western look if given the option, but I can handle more sculpted/realistic Asian ones. I cannot stand a majority of koikatsu ones (not all, just quite a few), the colors are usually too bright, and things just feel too off putting proportion wise, or cartoony.
daz3d only because I created a custom morph that fixes the clunky youth morphs and the awful breast shapes. Just think ND3D over on renderhub but much better bodies.
Definitely DAZ for me. Koikatsu is too cartoony for me as far as VNs go although I have really enjoyed a few. I will say that animations are a lot more fluid but personally I prefer a more realistic look.