Recs.
Updated
SpecsUpdate
Pros
Pro High performance on the server and client side
Apart from their functionality all template engines need to be efficient in terms of the time they require to render a page. Jade beats most of its competitors in this area, it is highly optimized to deliver good performance on both the server and client ends.
Pro Preprocessor support
Filters make it easy to embed compiled languages such as coffeescript or markdown directly into the template. A filter will allow you to keep your inline code and content consistent with the rest of your codebase so you can continue using your prefered language with your outputted HTML.
Cons
Con Cannot copy/paste examples from the internet
Examples from CSS frameworks like Bootstrap are never utilizing the Pug syntax, which means that you cannot ever copy/paste something to quickly see how it would look or if it works. You would have to convert the HTML to Pug first.
Con Unforgiving in case of indentation errors
The structure is entirely determined by the indentation. That means that indentation errors will ruin the end result, often without an easy way to find the error. Indentation errors are easily introduced by copy-pasting, by rearranging code and by working in a team where not everyone uses the same indentation style. (E.g tabs vs. spaces.)
Con off-side rule templating language not working well with native HTML
plain HTML pages usually can contain very deeply nested structures, whether they are hand-written by web UI designers or generated from popular web design tools or taken from existing HTML templates, which are a nightmare for front-end engineers to convert into Pug templates, where you have to take care of handling the indentation rules and the deeply nested HTML elements, even creating multiple blocks that don't have any meaning in terms of business logic, just to house the HTML elements within bearable amounts of indentations.
Pug templates are nice for Python programmers who don't want to learn HTML to start writing web pages and develop some entire websites personally from the ground up, but for any serious project that involves more than half a dozen people and has separate positions of web UI designers, front-end developers, and back-end engineers, it's much better to choose something more closely compatible with native HTML as the template engine. Pug is simply too alien from native HTML and resembles a lot more like those other off-side rule languages like Python.
Con Bad performance
Bad sintaxe (Short-hand HTML) and bad performance. No streaming or asynchronous calls. https://github.com/mauricionobrega/nodejs-template-benchmark
Con Performance is not great compared to other popular templating engines
Recommendations
Comments
Out of Date Pros + Cons
Con No HTML syntax
When working with templates it's extremely important to understand the HTML elements at play, and to see them as natively as possible. Jade removes this, making developers have to do the abstraction in their heads.