Not sure if i am understanding.
Perhaps you are referring to upscaling? that can be done in Krita AI Diffusion as well. Or an AI that does everything? So far i didn't saw such thing, but what you want can be done by using different tools in a workflow.
Or perhaps you are referring to use something like Dall-E3 or Nano Banana to turn a draft into a image or spritesheet and then using a background removal? Blender and Anim8or are good. In fact, you may need them for retopo and animation, and some cases even texturing since many img2mesh models don't texture or made a hellish UV map.
Taking about Rare's style I think common tools used back them were softImage and RenderWare, but i can't say for sure since back then was pretty common for studios to create their own engines and tools from scratch. Today the most close thing i can think that could help to create similar aesthetic are 001-Game Creator, AGE for 2D and the CopperCube for 3D, wicht is powered by a really old version of Irrlich, a competitor of RenderWare. Maybe combining those with a 'old school' style lora may help.