I fail to see how fanservice breaks the immersion in a game but spiky haired protagonists wielding impossibly large swords and casting magic spells doesn't. It's a fictional land where impossible things are possible, but a little bit of skin is still wrong.
Xenoblade is still my favorite RPG and I was really feeling it regardless of what armour the characters were wearing.
It's all about context.
For example, take Kill la Kill, which is notorious for the fanservice. I didn't mind it at all.
Kill la Kill is meant to be silly and over-the-top. So, even if foes are stripped naked by Ryuko's Scissor Blade, it doesn't matter because the whole series is played up for silliness. It works in the context of the story and how the series is presented.
Now, back to Fire Emblem, every time the series brings the themes of war, the story becomes serious and the characters act like how they're meant to act in such a setting: discussing tactics, finding out the enemy's motivations and so on.
Even some enemy bosses are sometimes sympathetic, touching on themes such as loyalty and duty. Likewise, characters you may recruit from the enemy will be branded as traitors by the opposing faction.
When in the middle of such a scenario, you have a character that, as soon as she strikes down an enemy soldier, said enemy is stripped naked out of nowhere, funny as it may be, trivializes the story's themes.
This same element, striking down an enemy and stripping him/her naked, has a definitely different impact depending on the context. In Kill la Kill, it's acceptable and funny because used in an over-the-top, absurd scenario, in Fire Emblem, it breaks immersion because it's used during serious moments. It's all about context.
Sure, you say it's fiction, but there's different types of fiction: there are comedies, there are dramas, there are horror stories and so on. Sure, it's possible to mix multiple genres and some stories are great because of that. But it has to be well done. It's all about quality of writing and handling tropes well.
Fire Emblem has always taken its warfare themes seriously, in spite of more humorous character interactions, which was handled carefully depending on the scenes. To see the series being degraded like this is a letdown.