It's up to developers to utilize the possibilities of the new engine rather than just import old graphics into it. Look for example how my avatar was changing through updates. The 1st and the 2nd (from the left) images are on the same pre-2009 Gamebryo engine, but the 2nd one is after they updated the avatar system in 2008 in preparation for CE2. The 3rd image is right after the CE2 update, you can see it's pretty much the same model, if slightly smoother. The 4th image is still CE2 but after they changed the avatar system again in 2014.
Also compare exactly the same outfit right
before and
after the Cryengine2 update.