You need a year based criteria, like the best graphic in 2023, 2022, 2021 etc.
Although many game still holds up for many year, but that does not do them justice
Some of the games that comes to mind: MGS2 2001, RE 2002, RE4 2005, GoW 2007
If you are strictly talking about modern era gaming without any criteria, some of the games that came to mind were Order 1886, Uncharted 4, Last of Us Part 2, Horizon 1 and 2, Gears 4 and 5, Cyberpunk 2077, Detroit Become Human, Resident Evil 2 Remake in their respectable years, aside from graphic fidelity, I'm also taking performance into account, for example Resident Evil 2 Remake's graphic is well beyond what its performance provide, many mid range PC could max out its setting and still have relative high framerate. And for many Sony exclusive games, these game look very impressive consider how mediocre their hardware was but still provide good visual that is comparable to more powerful PCs
In terms of art direction, that is very subjective, different art style contribute to different motif, theme, aesthetic etc. Even pixel art could look good if it's used correctly, Tactics Ogre and Triangle Strategy looks beautiful. But I think when people talking about graphic, their criteria probably was "in terms of realism".
However if by released you also include Demos, then the Matrix Demo is well beyond anything that is on the market