For faucets and knobs/pulls, I think polished nickel is fine. We have satin nickel faucets in our kitchen and powder room and have no tarnishing issues in over 4 years...maybe it's the "type" of nickel finish and/or how it's applied.
Where I would not use nickel of any sort is for the drains, strainers, and/or disposal flange. Nickel can be damaged by harsh cleaning products such as Bar Keeper's Friend or bleach. So, use either chrome or stainless steel for these items. When we did our kitchen & powder room, I was careful to specify brushed stainless for the flange and strainers, but forgot in the powder room. I had to bleach my powder room drain and I accidentally spilled some bleach on the drain and it pitted very quickly. I wish I had remembered to get SS in the powder room as well!!
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