Interfacial exchange coupling is known to improve the permanent magnetic performance (i.e., maximal energy product) in composites of magnetically hard and soft particles. The prevailing strategy, employed in a plethora of compositions, consists in maximizing the coupling between the hard and soft phases and optimizing material parameters such as particle size or phase composition. In CoFe2O4–FeCo nanocomposites, it is experimentally shown that interparticle uncoupling in combination with the sizes of the soft phase grains below the single-domain threshold leads to enhanced magnetic properties at room temperature, while maximizing exchange coupling implies a collapse in coercivity and hence in the maximal energy product. The results are corroborated by micromagnetic calculations and the origin of the exchange-induced softening is discussed. It is emphasized that engineering interfaces in order to optimize, rather than maximize, the degree of exchange coupling are a necessary requirement to improve the energy product in nanocomposite magnets and to successfully develop advanced rare-earth-free permanent magnets.