Yeah I've actually had a very evolving position on in-game communication (not chat, but like, communicating to the player what's going on) -- I came in as a fan of a more raw experience (no dmg numbers, hit confirm, etc), but I've pivoted to trying to maximize in-game communication. Directional damage indicators is the most recent addition.
I think one of the big reasons (other than cosplay potential) that all these games are going with characters is that it makes it more readable. You see a specific character, or even just a silhouette, and you are able to infer it's capabilities -- you know what weapons/abilities it might use against you. I think it looks stupid when you have multiple of the same characters (like, they are literally the same person) running around on screen and I greatly prefer the flexibility of a loadout system, but readability is something I'll have to address in other ways (made especially difficult by the long distances in AoT). I got some ideas though.
One of the major examples, specific to AoT, that I need to tackle -- being stuck by the Teleport Blade. There's a big red blinking light at the bottom of your screen, but I don't think that's enough for newer players.