Rose-tinted glasses perhaps? ;-)
While the way the town / world lived in Gothic was a great novelty back then, it's not the case anymore. It's been part of basically every open world games produced since. Imo, the one I found the most amazing is in Cyberpunk 2077. The way the city breathes is simply breathtaking. More recent PB/Bethesda games have also been doing a great job at it.
Or perhaps it's the fact that even most modern games still don't have that level of realism in certain ways.
For example, you can enter any building in most RPGs and loot the shit out of them right in front of the occupants without so much as a peep. Same goes with brandishing your weapon in front of them. Not a word.
I'm not sure if it's because developers are too lazy to go to such detail or if it's because they assume gamers don't want to be bothered with any obstacles in obtaining loot. I suspect it's the latter, because I think a lot of mainstream gamers would probably get flustered if they couldn't just pick up loot whenever they want.
For the record, I didn't find Cyberpunk very immersive in that way. Don't get me wrong, I like the game a lot, but the worldbuilding aspects leave something to be desired. The way valuable items are simply laying around everywhere constantly had me miffed. "Oh, so this high-level katana is just laying on a countertop in a room full of people, and they don't mind if I take it? Score!".