[i_c_b]

I'm not exactly up-to-date on current techniques (I've been out of AAA game making for a while now), but here are some general observations that might be useful.

Way back during the transition from Doom to Quake, which in some ways really marked the transition from 2D to 3D, Quake's particle systems also relied overwhelmingly on small flat colored particles and their motions, rather than larger textured sprites and their silhouettes. (Quake did use a few sprites, but it was few and far between).

And I think the reasoning was pretty straight forward even back then; in a 3d game world, there are a lot of conceptual and architectural benefits to only working with truly 3d primitives - and point sprites often can be treated like nearly infinitely small 3d objects.

Whereas putting 2d sprites into a 3d scene introduces a bunch of kludges. In particular, 2d sprites with any partial transparency need to be sorted back to front in a scene for certain major blend modes, which gets really troublesome as there are more and more of them. They don't play nice with zbuffers. And because they need to be sorted, they don't always play nice with the more natural order you might prefer to batch drawing to keep the GPU happy. And likewise, they have a habit of clipping into 3d surfaces in ways that reveal their 2d-ness. There's probably more things I'm forgetting.

These are all issues that have had lots of technical workarounds and compromises thrown at them over time, because 2d transparent textures have been so important for things like effects and grass and trees. Screen door transparency. Shaders to change how sprites are written into zbuffers. Alpha testing. Alpha to coverage. Various follow-on techniques to sand down the rough edges of these things and deal with aliasing in shaders. And so on.

And then there's the issue of VR (or so a cursory skim suggests). I haven't spent time doing VR development myself, but a quick refresher skim of articles and forum posts suggests that 2d image based rendering in 3d scenes tends to stick out a lot more, in a bad way, in VR than on a single screen. The fact that they're flat billboards is much more noticeable... which is roughly what I had guessed before I started writing this comment up.

All of those reasons taken together suggest why people would be happy to move on from effects based on 2d texture sprites in 3d scenes, to say nothing of the other benefits that come from using masses of point sprites specifically themselves (especially in terms of physics simulations and such).