In the case of this game, the mouths were never open, the teeth were never visible at all. Which is obviously a massive failure of the developers (using a prefab model with a ton of completely unused detail is a waste of everyones bandwidth, storage and memory), but the teeth should at least never be rendered by the engine.
For anybody else reading this and thinking (like I did) that these comments about teeth are a deliberately silly example invented for the purpose of this discussion - it turns out that Cities Skylines 2 really did have NPCs with teeth in their models, per this[1] story from up the thread.
this is very computationally expensive to do such operation (to understand that teeth is completely occluded by something else like mouth)
this is called occlusion culling and usually it brings a lot of problems on its own (it's CPU intensive and you need to apply it smartly only where it helps)
and even if this occlusion culling would be cheap, the way how it is usually done requires precomputing a lot of data - so occluders are static geometry
since character head is skinned mesh - so dynamically changes every frame based on joints positions - that will be another level of complexity
