The way we have traditionally measured performance and optimized our games encouraged a lot of conditional operations – recognizing that a particular operation doesn’t need to be done in some subset of the operating states, and skipping it. This gives better demo timing numbers, but a huge amount of bugs are generated because skipping the expensive operation also usually skips some other state updating that turns out to be needed elsewhere.
We definitely still have tasks that are performance intensive enough to need optimization, but the style gets applied as a matter of course in many cases where a performance benefit is negligible, but we still eat the bugs. Now that we are firmly decided on a 60hz game, worst case performance is more important than average case performance, so highly variable performance should be looked down on even more.
It is very easy for frames of operational latency to creep in when operations are done deeply nested in various subsystems, and things evolve over time. This can lay hidden as a barely perceptible drop in input quality, or it can be blatantly obvious as a model trailing an attachment point during movement. If everything is just run out in a 2000 line function, it is obvious which part happens first, and you can be quite sure that the later section will get executed before the frame is rendered.
Besides awareness of the actual code being executed, inlining functions also has the benefit of not making it possible to call the function from other places. That sounds ridiculous, but there is a point to it. As a codebase grows over years of use, there will be lots of opportunities to take a shortcut and just call a function that does only the work you think needs to be done. There might be a FullUpdate() function that calls PartialUpdateA(), and PartialUpdateB(), but in some particular case you may realize (or think) that you only need to do PartialUpdateB(), and you are being efficient by avoiding the other work. Lots and lots of bugs stem from this. Most bugs are a result of the execution state not being exactly what you think it is.
In almost all cases, code duplication is a greater evil than whatever second order problems arise from functions being called in different circumstances, so I would rarely advocate duplicating code to avoid a function, but in a lot of cases you can still avoid the function by flagging an operation to be performed at the properly controlled time.
To sum up:
If a function is only called from a single place, consider inlining it.
If a function is called from multiple places, see if it is possible to arrange for the work to be done in a single place, perhaps with flags, and inline that.
If there are multiple versions of a function, consider making a single function with more, possibly defaulted, parameters.
If the work is close to purely functional, with few references to global state, try to make it completely functional.
Try to use const on both parameters and functions when the function really must be used in multiple places.
Minimize control flow complexity and “area under ifs”, favoring consistent execution paths and times over “optimally” avoiding unnecessary work.