The biggest problem I've seen with OKRs as an engineer is that the objectives are business goals the engineering team has little or no ability to influence. Like, an objective of "onboard 5 new large customers" makes sense for the business, and the engineering team could definitely screw it up by, say, building a system that can't scale that high. But when the sales team only closes 3 new deals, the engineering team fails its OKRs no matter how good a job everyone did. I've seen this be quite demoralizing, especially when meeting OKRs is tied to bonuses.

The second-biggest problem is that the time horizons of OKRs are often longer than the interval between pivots that cause the old OKRs to no longer make sense.