It's not really a very strong reminder for me. To me, ARR's graphics look superior to TF2's. But in terms of comparing ARR's level of detail to 1.0's, it definitely does seem a bit dialed down. Not drastically, and neither am I saying this was unnecessary or a bad thing. There's just a slight simplification of the graphics that remind me of TF2. When I say that, I don't mean it feels like Final Fantasy on the source engine.
To put it another way, I feel that on a scale of 1 to 10 in graphics, with 10 being the best, I would put 1.0 higher on that scale than I would TF2, in terms of graphical quality. (TF2's art style doesn't really demand higher level of detail/quality anyway, the artstyle and graphical level suit eachother) As for ARR's graphical quality... There are some additions they've made that 1.0 doesn't have, but when faced with just the character models themselves, I'd put them a notch lower than 1.0 as far as texture quality.
If it means the gameplay will be improved, then I look forward to ARR, graphics and all.
EDIT: The game could look 8-bit for all I care, if they managed to do that while improving the gameplay, I'd still look forward to ARR. Granted, 8-bit is a bit drastic, they can certainly do better than that without sacrificing gameplay, and that happens to be exactly what the situation is. X)