So to the best of my knowledge, here's vaguely how this all went. To my knowledge, this should all be pretty accurate, I was able to get a much better view of the situation after RE8 actually came out, I made some mistakes about RE8 before it released due to some mixed wires I got from sources. Part of the confusion before release for me where I got some facts wrong is the first time I had properly heard about RE8, I had heard it as Revelations 3. I had heard like back in 2019 that "Revelations 3" starred Ethan in a snowy European village that was a bit like RE4 in first-person, and Chris was like a villain character to Ethan and there was a very tall vampire lady. I later heard some things of a (I now believe to be) scrapped version of Revelations 3, but due to hearing about RE8 first as "Revelations 3", I had some wires crossed at the time, and got a bit mixed-up, In retrospective, I think what happened is the person who told me about RE8 under "Revelations 3" knew Rev 3 was in dev at the time, & Village was a side title at the time, so assumed it was Rev 3. Some of my earliest comments about RE8 being "years away" is because what is now RE9 but I had heard of as RE8 was still years away, Village & Rev 3 I had mixed some details up about, and it all ended up in a bit of a messy state for me. But I digress.
Back in 2016, There was a guy named Jordan Amaro who had worked at Konami with Kojima on titles like P.T., who joined Capcom after that disbanded. He had declared he'd direct Resident Evil 8, or else he'd quit. In his own time, he made a pitch demo for his version of RE8, and near the reveal of RE7 in summer of 2016 pitched it to Capcom. The higher-ups at Capcom did like the pitched demo, but not as RE8, instead it became DLC for RE8. This was also why the season pass of RE7 went up in price by $10 less than a month after it was pre-orderable on Playstation Store after the game was unveiled, an additional DLC piece that wasn't planned was greenlit. However, Jordan kept his word and left Capcom (went on to join Nintendo). Simultaneously, Capcom had received Not a Hero DLC back from a developer they had outsourced it to, but didn't like the results they got back. So several things happened around the same time right before RE7 even came out, they needed to rework the Not a Hero DLC themselves (which is why it got delayed), the second main RE8 DLC piece needed a new director & direction to pick it up, so RE8 was put on hold for a bit. Morimasa Sato was chosen to direct RE8 due to his writing on RE7 (and Jack Baker was essentially his "baby" and creation, and was the most well received aspect of RE7 in many ways). While the RE7 DLCs were put into development, the team also had to choose where to go with RE8 in the meantime.
Morimasa Sato's idea was Village, but his proof-of-concept demo was poorly received internally, and many within the team thought it was too "weird" for Resident Evil. Still, Sato helped lot in realizing the DLCs for RE7 come to fruition, so Capcom gave him a chance to continue to develop the idea under the idea it'd be a side game. Sato's idea was always it was going to be a direct sequel to RE7, it'd be a story about Ethan going to a fictional village in Europe.
Another idea started to form in early 2018 as a stand-in for RE8, a much more ambitious idea. I'm going to creep around specific details and leave some stuff out since at present the public doesn't know what RE9 is or is about (as this ultimately turned into RE9), but It started getting worked on, and the vertical slice demo made for it was actually really well received. But The idea was a bit too ambitious, and even before COVID it was starting to look like RE8 wouldn't be out until 2023 at the earliest, if not later. Capcom did not want there to be a 7+ year gap between mainline entries, and as luck would have it the Village side project had actually come together a lot nicer since the vertical slice demo. It was more of a lower budget affair, but the team was being creative with it, it was being received well internally, and coming together more on its own.
So, the call was made to replan the mainline titles. Village was un-sidelined and put back as a mainline title, to become RE8, and the ambitious idea that was supposed to be RE8 was replanned as RE9. Village was heavily reworked, and as mentioned they did a lot of testing behind the scenes, got a lot of feedback, and reworked a lot of the story, even reworked big sections of the game to bring overall polish up.
There were various changes through RE8's development, but that's a whole other story. Village always starred Ethan and was always meant to be a direct sequel to RE7. Its status as RE8 just wasn't so for something like 1.5-2 years of its development time (like from late 2017 to somewhere in 2019). RE8's story was changed to make it more in-line with a "mainline title" by Capcom's standards, and RE9's story was plotted alongside RE8's due to both being in development at the same time.
Ethan never changed, but there were some pretty radical other changes. Heisenberg was originally planned to be Lucas, which is why you see a picture of the old lady from Village in Lucas' birthday party puzzle in RE7, was supposed to be foreshadowing, but when reworking Not a Hero they decided to kill Lucas off instead (the monster you fight in Not a Hero originally wasn't Lucas, longer story there). The characters of Mother Miranda & The Duke were actually not existent in the game AT ALL until early 2020 when there was some big story alterations made in RE8. Some aspects of the story changed very little during RE8's restructure, but some changed a LOT. In my opinion, while most of the final story works, Chris' story was absolutely botched to be almost nonsensical in the final at least IMO.
I'm fairly positive everything I just shared is pretty accurate to how it happened, but I get people won't take what I say here as gospel or anything, is what it is.
