It's normal for all indulgent otaku media from anime to video games to vtubers to gacha. When you have (mostly) pure freedom of expression then you get a reflection of supply and demand. If anything lolis have been suppressed more in recent times, though.

If you take at designs from pre-covid they were far more wild and certain vtubers have had to either change their designs to stay on streaming platforms like Twitch/youtube if they're not banned outright. Old anime clips that were available everywhere on youtube that displayed the content removed etc. But in the end supply/demand is king in the world and stuff like gacha have had their formulas honed to what gives the most success over the last 15 years of trial and error.

Which actually comes out to a surprising kind of bell curve where lolis and titcows are a bit less present while medium premium makes up most of the designs.