Notably, The Mandalorian used puppetry for all the aliens. Using CGI for backgrounds but practical effects for stuff the cast actually interacts with seemed to work really well.
Not all, but a lot of them, but they also couch this specifically as a reference to... mostly Return of the Jedi, many shots contain puppets or stop motion animation that is actually shot at a lower framerate to play up the unreality.
Indeed - I love the Mandalorian but costumes/puppetry aren't on the highest level in my opinion.
The Grogu costed 5 millions[1]. I think it really is good one.