Pixelation is a very stylistic choice. Of course, when pixelating only a part of a video, we usually think of protecting people's identity or things like that. There are more character like uses for this. For example, if you think of doing an 8bit short film or something. You can still use 3D and have really pixelated characters in high detail environments.
Traditional is a very simple approach to pixelation:
Pixelate everything and blur mask the area to be pixelated.