16mm is perfectly fine on HD - as long as you expect it to look like 16mm and not... HD.
We have no idea if "LIB" on Blu-ray would be given the Peter Jackson Scrub.
He did that for his own version of the footage. Doesn't mean Disney would also scrub something intended to represent a film...
Or... it made the footage gimmicky and off-putting.
I never felt immersed in the material because it comes across like some CG reinvention of the footage.
It's never "real". The source has been manipulated to such extremes that it might as well be a cartoon.