As a kid I lived in homes with both - and a home with a barrel stove - and as an adult with a pellet stove and I don’t remember that being a problem. Net, it was fine?
The fireplace had a stone chimney - and the kitchen was built in an 'L' shape around the first floor of the fireplace. The (master) bedroom (an additional bedroom was built in the 1950s), the stone of the chimney was a good quarter of one of the walls.
I do, however, think that the rough hewn stone and mortar of the chimney with the insets around it had a certain rustic beauty... aside from the "that got warm" in the winter and could keep the kitchen, living room, and bedroom warm.
Open floor plans also destroy the efficiency as the heat goes up which made your already inefficient heating even worse.
Combine both together and you probably have 5% efficiency.
Old school version of that were masonry stoves that come with ton+ of mass for the bricks and smoke being routed all over (often including a place to sleep) to take as much heat as possible from it.
If I had money for that I'd put a big hot water tank for buffer, heat it normally with heat pump, and just had emergency water-sheathed fireplate, with big buffer you can just fire it up once and have tank slowly give the heat back to the building. Or fire it up at the coldest days to save some heat pump power in days where there is barely any solar.
I assume most decorative fireplaces on the other hand are not built to heat the house.
There's a whole site dedicated to the (highly efficient) Russian/German stove: https://larsenfamily.com/russian_stove/nojava/index.html
(It feels like it's getting warmer - may all be wishful thinking though, I haven't taken any measurements!)