The below video titled "Retro camcorders are EASY to use in 2026 (full guide)" was posted two years ago and has 241K views.
It opens with these shots:
and his first line is "retro camcorders are freaking awesome".
Maybe you're right that getting worse image quality isn't the primary motivator, but if it wasn't then I don't really know how to explain why anyone would be attracted to these camcorders when new/modern ones have all the same advantages of being a single-use device, have great ergonomics, novelty value, etc, but are also far easier to find, far easier to use (and don't require legacy computer interfaces!), are far more reliable, and have much better image quality.
Maybe the draw is that they're old, and therefore that's the novelty, but I've heard people gush over how they love the JPEG look from cameras that have 2MP cameras and the JPGs are hugely compressed and full of artefacts etc.
Here's another one comparing Hi8 vs MiniDV on the basis of the image alone.. 24K views!
It might also be a nostalgia thing, where the image quality is desirable because it's poor, but in exactly the right way.