TCP coming into your cluster means that you practically have to go through kube-proxy (because the load balancer and the Kubernetes scheduler aren't perfectly synchronized) and that the load-balancer can't balance per-request, only per-connection. If the load balancer terminates TLS, then it can just watch cluster endpoints and automatically route to the right node without any extra hop through kube-proxy, and it can also split large individual requests out of HTTP/2 and GRPC streams.

I'm guessing 99% of workloads won't notice either of these issues, but it is an actual issue.