Isn’t this the concept that a cartoon is acceptable because we can see it is a cartoon and accept that it won’t be 100% realistic but that an ultra realistic CG character looks so real that we start to judge it as real and the failures become very jarring/unpleasant?
I wonder if the cause of this is our natural ability to recognise/judge the suitability of others as potential partners and or recognise ill-health. We make a lot of unconscious decisions about people based on tiny physical/physiological cues that they give off. Many of those cues will be missing from a CG character so we would read them as ill/dead/zombie – not nice!