Quantizing at any level can make a piece sound mechanical.
The best level of quantization is the one that matches the shortest notes in the piece. If you quantize to 1/8 and you have 1/16 notes in the piece, it will shift these to the nearest 1/8 mark, and this can result in a jumble.
Alternatively, if the smallest you have are 1/8 notes and you quantize to 1/16 and your playing isn't very precise, you can shift notes to the nearest 1/16, which may push wayward notes off the beat and sound worse than a natural variance.