For me it was encapsulated by doom 3 for the most part. Games with strong dynamic shadows like splinter cell chaos theory and stalker with a mix of shiny specular effects is timeless for me. When I go back to these games the shadows still feel as good as they did when they came out and the lighting perfectly crafting the mood. A lot of modern games now even though their fidelity on paper is much better just always feel extremely flat to me and don't pop out of the screen like they used to. It seems like they're missing contrast and UE5 seems to make this even worse where all the games using it just look like mush
I think the PS2 era had the perfect balance between fidelity, fun, creative limitations, and requiring fewest people to create. Previous eras were plagued by early hardware limitations (plus learning curve for 3D), and later eras grew so graphically intense it required armies of artists.
Maybe it's nostalgia, but I agree that it was a sweet spot for game development. Developers and artists were more confident with making games in 3d, and they could do it cheaply enough that even big companies would publish pretty experimental games.
Then the shift to HD happened a budgets and dev times skyrocketed, leading to the dreaded Brown and Bloom "Realistic" Third-Person Shooter with a bald protagonist.
I so wish the PS2 was accessible enough for indie devs to make games for it the way that Gameboy, NES, and some older consoles are. I know it's nostalgia speaking, but that really was the pinnacle for me.