I don't know about Retro but Nintendo and Rare's difference is that, Nintendo is gameplay above all else, sometimes to a fault. Rare is... maybe not characters above all else, but much more world building focused, perhaps to a fault. Like there's a part of me that likes that in Banjo Tooie there's an oracle who opens the worlds for you... the other part of me is like, in the first game you can just walk up to a button on the ground to open a world, not have to find some specific guy.
They actually made this one easier by attaching a character to it, you're always going back to the same place now instead of having to find the picture for each world. Tooie letting you easily warp back there makes it painless to do, though on the other hand, I think the minigame of actually assembling the picture is a pretty pointless addition.
If anything in Tooie suffers because of worldbuilding it's the way they expanded the size of everything without increasing Banjo's speed to compensate. Over the course of a playthrough you will spend entire minutes walking in and out of Mumbo's new two story house. Tooie is an ambitious game where a lot of its decisions have trade-offs like that, like Honey B is somewhat necessary to provide an interface because the empty honeycombs are more complicated and don't offer extra health at the same amount each time anymore. Which moves the debate to the merits of that change in the first place, but her existence wasn't arbitrary.
The only complete misstep I've encountered with this in a Rare game is the pause menus in Star Fox Adventures. I just want to check how many bafomdads I have, but General Pepper is yelling at me and I feel like I'm trying to use the toilet in prison. Just totally overdoing it by shoehorning in characters where they don't belong.
I've thought about the whole character versus utility thing before, and there are some
examples of it having downsides, but it's a mostly unfounded fear and I'd take it any day over sterility.
Having to visit Funky and Candy/Wrinkly in the first two DKC games to save/travel wasn't just an inconvenience, for example, it was a deliberate design decision that was trying to make a compromise between the tension of a lives system and the ability to replay levels. In every Mario game since World, extra lives are nearly pointless because you can grind them out at any time with complete ease by playing the early levels over and over (that is if there's even a consequence to running out beyond getting kicked back to the title screen).
DKC recognized this, and made it so that stretches of the game would lock you out of easy grinding. DKC2 took it further by not letting you spam saving and traveling for free, something it's often criticized for today. Both games also reset your lives and coins whenever you resume the game to keep you from stockpiling them, something they didn't have to do from a technological perspective (3 actually saves your coins).
They're imperfect systems, but I respect the attempt a lot as someone who finds Mario 3 very systemically beautiful and has a more contentious relationship with most of the things World introduced to the series and genre (secret exits are the worst part of Tropical Freeze). That future DKC entries/versions let you save and travel at any time is more convenient, sure, but there were game design trade-offs to that change too, it wasn't just about cutting out the character middlemen.
And they could have found a way to preserve and even enhance that at the same time if they really wanted, like if after you beat Mugly in Returns, Funky Kong showed up and was like "Woah dudes! You can use my super turbo barrel plane to travel across the island!" and then they had an animation of the plane circling instead of Squawks when you hovered over a world, with Funky making comments about the place or just having random dialogue, like when you hang around Gruntilda's Lair in Banjo-Kazooie. But this is a game where the worlds are named "Jungle" and "Cave", so of course it doesn't have that, mechanics have nothing to do with it. Bottom line is that character and "gameplay first" design are not enemies. Banjo-Kazooie and DKC2 are two of the most immaculately designed platformers ever made, but they're at least as acclaimed for aesthetics and personality as they are gameplay.