I don't particularly see the problem with Yu's comments about the combat. The enjoyment never particularly hinged on your ability to pull off a complex fighting game-style move like Demon's Triangle, and IMO the combat was at its best when you were correctly judging the opponent's moves to dodge or use the context sensitive counters.
The most complex move I did in this clip was -> -> B. Everything else just came down to single button presses.
There's also the fact the fighting game inputs limited how Ryo could attack. You were kind of at the mercy of the game's auto-targeting system, and couldn't freely head off attackers coming from other angles than what was directly in front of you. Yu said at Gamescom last year he didn't feel it was truly a combat system that allowed you to take on multiple opponents, and I have to agree.
I play the 70 Man Battle every few weeks for fun, but I can totally see why Yu wants to give Ryo a truly 360 degree arc of attack. That means jettisoning the fighting game inputs to make it work, though. And let's be real here; fighting game inputs would be at odds with controlling Ryo with the analogue stick anyway, which is likely how III will control once it releases.
While I'm expecting a blurred line between QTEs (see the Baihu fight in II for an example), cutscenes (see the second Xiuying fight in II for an example), and combat to give that cinematic feel Yu wants, he also stated categorically in the 500K group's interview at MAGIC that:
Yes, basically it will be like Shenmue 1 and 2; where you move in real time when you press buttons.
There's no ambiguity there. It's still FREE, and it seems when Yu refers to timing in regards to VF he means in terms of move execution (i.e how quickly you can pull the move off on the pad/arcade stick). I genuinely don't think the ability to read opponents moves and respond accordingly will go out of the window if he wants to make a "thinking style" game.
