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Having human length proportions for the upper bodies just looks weird compared to prior designs feeling more stocky. And even if it’s meant to resemble the old SNES/SFC box art puppets, those still look better than what they have going on here in terms of head to torso.
Then there’s suggestion of the mammalian characters now walking on just their toes and balls of their feet instead of the whole foot? Do they not realize how weird that comes off as for humanoids? Like yeah, it’s more realistic to most mammals, and when it comes to bipeds, humans really are the weird ones for walking with the whole foot on the ground (plantigrade rather than digitigrade). But every other biped (all birds, some dinosaurs) or obligate biped (kangaroos, wallabies, and a few hopping rodents when actively moving; otherwise they're almost more pentapedal due to their tails) is built with the torso and abdomen in a much more horizontal alignment, depending on how their mass is distributed. Try running on just your toes and balls of your feet. Try standing around for a while on just them. Sure, it’s doable, but it’s also really awkward to do let alone see.
Falco I will say has less problems in the latter department (sort of the way the Rito in modern Zelda games look), since his toes and claws seem long enough to keep him stable even with his legs being more "realistic", but not Fox or Peppy.