This is actually discussed on the live-action animated film Wikipedia page.
Since the late 1990s, some films have included large amounts of photorealistic computer animation alongside live-action filmmaking, such as the Star Wars prequels, The Lord of the Rings trilogy and the Avatar franchise. These films are generally not considered animated due to the realism of the animation and the use of motion-capture performances, which are extensively based on live-action performances by implementing actors’ movements and facial expressions into their characters. Roger Ebert said that “in my mind, it isn’t animation, unless it looks like animation.”
Related note: I’m quite nostalgic for the mid-20th century live-action animation trend (even more so than the late-20th century puppet trend). If the characters are going to look fake regardless, the animated ones are way more expressive and, well, animated.
There’s also a lot of difference in mocap vs traditional animation. When characters are animated they follow certain principles that aren’t realistic but result in pleasant and entertaining movement. Real humans and creatures don’t behave this way.
So when animators are working on live action films they have to carefully balance the adherence to these principles with the realism of the scene.
There’s obviously liberties taken (the mocap data is always cleaned up before being applied to a character) but think of the difference between an explosion in a Michael Bay film vs one caught on someone’s camera in real life.
Sounds like you’re unfamiliar with the widespread use and long history of rotoscoping in traditional cell animation. Motion Capture is just rotoscoping with modern tools.
