Can you source this rumor? It sounds like the Occam's Razor on the problem.

It doesn't take that much to add a butthole to a CG cat. And if you're sitting there drawing CGI cats for 60 hours a week, that butthole is the one thing that brings you joy. Then suddenly the studio decides that uhhh, this clusterfuck is going to lose any money you throw at it so three quarters of the VFX crew gets pinkslipped. Which means the buttholes that were an in-joke for six studios worth of pixelmonkeys? Suddenly become a stab-to-the-eye reminder of back when things sucked less.

Tom Hooper and CGI musicals aren't new; when the quandry of "how do you get people to sing"/"how do you not show big stupid microphones everywhere" for Les Miserables was solved by rotoscoping out all the mics, Tom Hooper got a bad impression of what CGI is and does. Granted - any child can be made to grasp "it takes twelve hours to render the fur every time we change the moves" but Hollywood is a culture where everyone bends over backwards to not upset the children. Ever seen a dozen PAs making $15 an hour trying to detail an Escalade in a mud pit using wet wipes so that the network exec can get picked up in a clean car? I have.