I’d argue that immersion has little to do with graphics, even for FPS. Actually I had more immersion in some text adventure games than in some AAA games — and not out of nostalgia because I never played the said text adventure games before.

I’d agree that certain degree of graphics helps with immersion, but photorealistic graphics only offers cheap immersion which turns off the immersion centre in the brain — Ok this is just my babble so 100% guess.

Agreed. Immersion in a game world, at least for me, is less about how accurately it visually reflects reality and more about how detailed the overall world feels -- whether the designers have crafted worlds that feel like they live and breathe without you, that you could imagine inhabiting as someone other than the protagonist. For instance, I can imagine what it would be like to live in Cyberpunk 2077's Night City, whether I was a merc like V or just one of the nobodies trying to get by that you pass on the street; I can imagine living in Dishonored's Dunwall (or the sequel's Karnaca) in the chaos and uncertainty of their plagues; I can put myself in the shoes of one of the faceless, downtrodden members of the proletariat of Coalition-occupied Revachol in Disco Elysium; a lot of AAA games, on the other hand, feel like theme park rides--well-crafted experiences that are enjoyable but don't stick with you and discourage you from thinking too deeply about them because they don't withstand much scrutiny. But Cyberpunk 2077 is evidence that they don't have to be that way, and Dishonored and Disco Elysium are equally evidence that you don't need a half-billion-dollar budget and photorealistic graphics to create immersive worlds.

(edited to clarify that I'm not laboring under the misapprehension that Cyberpunk 2077 isn't a AAA game)

I recall a paper from GDC many years back that studied the perception of immersion and they measured and ranked maybe a dozen different factors. Graphics and visuals were surprisingly low on the list. The number one thing was the player’s sense of identity and clear understanding of their goals. Players tended to correlate realism with high immersion too.