Arcanum more than earns its reputation as a flawed gem. To quote another codexer, "it's so rough around the edges that it may as well be a circle". The game is very unpolished in the second half. For example, typos and grammar errors show up frequently("Drog Balck Tooth" and "you're experience" among others), and dungeon design goes from slightly annoying to a dull slog. The second half is noticeably rushed and while it's not a massive jump off of a cliff quality-wise, it definitely feels less cohesive compared to the eccentric and excellent first. I think a good indicator is how few quests there are in Caladon. 5 in Caladon(7 if we include the master persuasion quest and the gnomish conspiracy) compared to around 16 in Tarant. The game feels front-loaded to hell and back. It reminds me of Torment, where the first half is open and the second is pretty much only plot from Curst to the Fortress.
It didn't change much for me, but the graphics and many of the non-spell animations are just plain ugly as well(that prowling animation tho).
Now, character creation, reactivity, and questing are where the game makes up for the aforementioned flaws for me. This game has some of the best sidequests I've ever seen in a game - the gnomish conspiracy, the ancient gods, stealing the funerary stone, bypassing the bandits at the bridge, and the list goes on. It feels refreshingly open and varied, and none in a way that I thought to myself while playing that they were just copy-pasted or reskinned from another game.
The classless character creation was one of my favorite things about Fallout 1/2, and it carries over and multiplies - there are more interesting skills and spells, races, backgrounds, and more. A complaint that gets raised often is that Arcanum is unbalanced, but that misses the point, IMO - finding ways to make ridiculously bad or strong builds is part of the fun. Right after finishing the game for the first time I jumped back into the game and made a combat mage that didn't use Harm, and it was a ton of fun. People are still finding ways to break the game with OP builds, and I think that that's a testament to Arcanum's flexibility and freedom, to have a cult following playing around with your game over twenty years after it came out.
The character building also carries over into reactivity, where the game derives most of it from. I actually laughed out loud when I was denied a train ride because of my magick, getting thrown out of shops because of my race, yelled at because I was ugly, seducing people due to my charisma, making headlines after solving a crime among others, Arcanum feels very alive and adaptive. I truly feel like I'm a part of the world and that I'm having an impact on it without it feeling like the world revolves around me or is hand-crafted to be played in, and that's one of its core strengths.
This at least made the game justify being played for me, even though it didn't for a ton of other people and I can understand that.