The art I've seen of the game look great, but I really hope those screens only look that way because it's early development, and not because they're a preview of what the game will look like.
that's kind of a normal thing we all do every day walking around.
If you wanted to simulate real-life movement you'd probably just use movement circles and sized units. Four way movement works because a 2D plane only has 2 axises. I mean you could use 8 way movement and then try to simulate real-life movement closer but at that point why not just use circles?
Probably because they're trying for what sounds like a Tactics Ogre/Final Fantasy Tactics thing with flanking mechanics (which becomes a whole shit load more awkward when you're trying to figure out where the frontal assault ends and the flanking begins in a circular movement system; both for the designer and the player). Additionally, they'd have to work out things like choke points and traffic congestion with circular movement, and my experience with Sakura Taisen doesn't inspire a lot of hope that it won't end up being awkward as all hell (then again, ST has rather large character units due to the giant robot armor factor which is probably why the battles in those games become more of an issue of picking the one to lead your single file march on the enemy than actually fighting them; that, and lousy map design, the SRPG elements were unfortunately more of a side attraction to the Dating Sim elements).
Unfortunately, I suspect that they aren't going to be ditching the 8-way grid at this stage, since doing so will mean having to redesign every map they've made thus far (even though hexes or a node based movement system would've worked so much more easily than an 8-way grid). And while the graphics might get touched up later on, I wouldn't be terribly surprised if they don't look that much better than how it does in those renders. After all, these guys aren't exactly an army of computer graphic artists aimlessly rendering 15k polygon flowerpots like Squeenix is.