I disagree, I think a lot of raytraced shaders successful make the game look better while still leaning into the stylized look. I also think it's unfair to say the game looks bad originally. It doesn't look realistic, but it has a consistent and compelling visual style.

Look at the Minecraft update trailers for example. They go in that direction even further, by simplifying all of the textures. Yet even with the perfect offline path tracing, it doesn't look bad.

I'm a big fan of raytraced Minecraft, but I also generally use texture packs that benefit from ray tracing. I've found that rather than something for realisim, finding a high resolution cartoony texture pack makes RT shine for Minecraft. Because yes, the game looks bad on purpose, lean into that and make it cartoonier too.

It makes for great survival horror when you're on the cutest cartooniest texture pack you can find and you're out after dark without a torch or lantern and its just pitch black except for the light of the moon, barely illuminating silhouettes against the deep purple sky. You see the monsters approaching. You turn a corner and see it, the most adorable thing you've ever seen, with death in its eyes made visible only by your own reflected moonlight. It's too dark to run. Good luck.