lo-fi isn’t a genre in itself, but a feature of indie music. lo-fi music exists because independent producers mixing music in the 90s-early 00s would have to average out the audio quality of their source recordings based on the mixing equipment they owned. Like how commercial quality videotape has a distinct aesthetic from cinematic film.
Nowadays, it’s a stylistic choice that broadens the gamut of sounds and samples a producer can use in a single song by equalizing tracks through lo-fi filters. Modern Lo-Fi hiphop is a genre where the softening of the original samples is necessary to capture a more relaxing vibe.
For example, in D.A.N.C.E by Justice, you can hear how lofi filters are used at the beginning and ending of the song and underlying instrumental tracks in order to draw attention to the main melodies and build hype and intensity without needing to drastically increase the volume or speed.