I would only ever recommend a 120mm AIO in very small chassis like mITX or where no other options are available.
The issue is that many people assume that because the term 'liquid' is used for an AIO, it automatically means its better, which is not true at all. Most AIOs in general use very cheap parts and use pumps which move very small volumes of liquid compared to custom watercooling pumps. Ex: AIO pumps might move less than 1 liter per minute, where a custom watercooling pump like a D5 or DDC might move nearly 4-5x that much per minute. For AIOs, the benefits come from the larger radiator size and high RPM fans to dissipate thermal energy.
Liquid cooling requires the following to work:
Pump/coolant flow rate
Block effectiveness (pressure drop, thermal conductivity and specific heat)
radiator effectiveness (volume LxWxH, fins per inch, number of cooling channels, pressure drop)
thermal efficiency of coolant/water used
fans used: CFM and static pressure
ambient air temperature
If you wish to change any of these values but maintain the same performance, you must change another item in the equation to balance it out. It is not possible to maintain or improve liquid cooling performance without changing 1 or more parts of the equation balance.