I just don't like to admit anything Nomura does is good, lol. (Do to his involvement in Final Fantasy) I actually like his work in Kingdom Hearts a lot, and find his characters in this game could be Organization XIII members with a few tweeks (like black long coats).

I would add their biggest difference is not skill as much as experience and style.  I think Nomura has a better grasp on what will translate to a 3D space and how.  Worth pointing out is you are comlaring characters of different ages.  Pyra is young, the white haired dude is middle aged.  This is noteworthy because in anime inspired styles, facial features are usually shorthand for age.  To prove my point, in the E3 Xenoblade 2 trailer, you can see a character near the end with a great sword dressed in blue.  He is not a Torna member and is a party member so he is a Saito character (the hair also kinda indicates it).  And if you pause and look at him, he shares a lot of similarities to the Nomura characters with smaller eyes and a more defined nose, cause he is markedly older than Pyra and Rex.  This can also be seen in XCX (compare Lyn to Lao to the commander of Blade) and XC1 (compare Shulk to the Colonel, Dunban, or the Emperor).  So the divide is smaller than it seems I argue.  

The bigger difference is Nomura's characters have his signature edge/darker fantasy undertones while Saito's have a bit of whimsy - for lack of a better word - to them.  Which can be a good or bad thing depending on your taste but I would argue is not really out of place in the series tonally.  I mean, step back and take an objective look at a lot of outfits in Xenoblade Chronicles, theres a lot of unusual looking stuff.  Even Shulk and Fiora's default outfits have an unusual appearance.  The game that's the oddball out is XCX, which obviously took a more scifi approach with a lot of western influences.  

And don't misunderstand, I love the armor in X, the outfits and armor there are my favorite of the 3.  I'm just sayin, despite there being clear differences between XC2 and XC1, there are also clear similarities in the character and armor design delartment.

It isn't a matter of more defined noses, it's detail to the nose at all. Something that can be seen in Roxas and Sora, ect. And something that cannot be seen with the new, completely anime artstyle. Same with Lyn in Xeno X and same with Melia in Xenoblade. All with defined noses. Simply put, Saito's style (anime) simply doesn't match up in some regards to experienced game character designers.

AS far as Shulk

And Fiora

Yes and no. It isn't any more out there than Elma's

I wouldn't say they go nearly as far as Rex in scuba gear mode (sword overstylized as well)

Worth noting Fiora and Shulk are wearing clothes, Elma and Rex are wearing Armor.  For clothes, their designs are unusual, especially compared to clothes in X which are far more down to earth.  Put the two in armors and you have a better comparison.  Lots of armors in XC are on the same level as XC2.  And worthy of note, his armor isn't supposed to look perfectly neat, it appears to be made of scrap components.  Rex is a scavenger.   And the sword?  I recall numerous weapons in both games that were as elaborate, again especially in XC.

And I didn't say they were identical, just pointing out parallels.  All anime inspired styles use this visual shorthand, not all do it the same way.

You're the one that wrote "Even Shulk and Fiora's default outfits have an unusual appearance." Which I mean sure, but not any more than Elma's has a weird appearance to it.  I'll get into Xenoblade and X's armors when I get home from work. I think there is one with light valkerie headband and armors that look pretty much ripped out of one and put into the other.

I did not mean to imply their outfits are identically unusual.  Just that the outfit aesthetics of XC have been weird from the word go.  But it is worth noting standard clothing in XC is equally unusual to armors in XCX while clothing in XCX looks almost like something you could go buy in a store.  

And yes XCX has some armors in the extreme cases that can be very weird looking, especially when you get into certain alien created armors.  But the average armor is more restrained and practical in appearance than in XC.  But really, that's all beside the point.  

My point was simply that Rex's armor is both contextualized and not peculiarly odd among otufits in the series.   Or more specifically armors.  

Xenoblade Chronicles X took armour further than I have ever seen a game do it before. As Earth advanced technology and expanded trade to other civilizations, their armour evolved a lot over time.

I do think the first Xenoblade had a major influence on the armour designs - and Xenosaga had a big influence on both games. Xenoblade Chronicles 2 is a very different direction from any past Takahashi game, as far as character art goes. I think Takahashi just wanted a change, to do something different for this game.

I agree with you that Xeno X has by ar the stranger outfits later in game. I also feel the parallels between the armors in the original and X also seem a lot more similar than in 2.

Example

Xenoblade

Xenoblade X

As I daid in my last post, XCX has a minority that reach the standard levels of unusual design seen in XC1.  Look at Sharla's armors.  Look at all but one of Fiora's robotic armors he quoted.  

XCX has a baseline that I would say is fairly down to earth with extremes that look unusual.  XC1 has a baseline that is already unusual and it ramps up from there to the outright bizarre.   I dare say all of those Sharla and a couple of those Fiora armors he posted are more strange looking than Rex's and of course uncontextualized.  

And as for why he went with Saito over other artists.  Could be his prior artists weren't available.  Could be he didn't think the art from XCX would mesh as well given its association with Xenogears, Saga, and X which are all mecha and scifi.  Or maybe he felt the more expressive characters would help address one of the major complaints agains XCX's characters (I feel these were exaggerated bug still hold some water).  Could be he just wanted to give something new a try.  Could be a combination of allof those (this is often the case). 

I would also be interested in knowing if the 3D art team for characters is the same as previously, they are half the equation here.  Especially in this instance.  Translating anime inspired art into 3D is an art unto itself.

I'm gonna replay Xenoblade before this one 😀