Calling the animation style a downgrade is definitely a hot take - this film followed in the footsteps of Bad Guys and copied a lot of its rulebook from that film, and most everyone agrees that both films did a fantastic job with their visual styles.
Not everything in the new Puss 'n Boots film is to my liking, as certain portions of the film and certain character appearances clashed hard with everything else there, but the Shrek films thrived on a jarring too-real visual style which made everything slightly unnerving - this was largely adjusted in the fourth Shrek film, but the whole off-putting nature of the visuals and approach to storytelling is so tied to the film property I can’t make myself imagine a Shrek in this style.
But this isn’t a Shrek film, it’s a spinoff film loosely based around an existing spinoff film which was absolute trash. So it’s more than free to play by its own rules, and being the first film in which Puss doesn’t look creepy definitely gives it ground imo.
But on topic:
I’m curious what you mean by this. Do you mean less character detail, a lighter weight to the dynamics of the world the characters live in, the exaggerated and snappy animation style, etc.?