I think it’s becoming very clear that it’s going to take something drastic for Ryo to realize the gravity of his situation and as of yet, aside from perhaps Nozomi being kidnapped in the first game, I don’t think he’s really had to face any real consequences for his choices other than the odd beat down.
From a narrative point of view, I think Ryo remaining determined at the end of S3 makes a lot of sense (although I agree that the ‘you’d better not run’ inner-monologue was a tad strange). He has literally overcome every obstacle in his path right up to the final encounter with Lan Di in spite of (and perhaps to some extent, because of) his stubbornness. Even then, he still walked away from it relatively unscathed.
There’s certainly an argument to be made that these consequences could and perhaps should have occurred somewhere throughout Shenmue 3, but realistically, it’s likely to take something big for Ryo to take a step back and see the bigger picture. Big like Ren’s death, for example (it could also be Shenhua, but given her importance to the narrative, it seems very likely that she’ll stick things out until the end).
If Ren still has a part to play in the story (apart from his death), killing him off in 3 wouldn’t have been an option for Suzuki nor do I think the relationship between Ren and Ryo has been developed enough for the death to really hit hard enough at this point (it would have been nice to see their relationship developed a little more in S3 to this end if this is where the story is heading).
The pacing of Shenmue’s story feeling a little disjointed is a problem that the series has faced since the very beginning, but there is clearly a plan in place and as some of these narrative decisions begin to pay off later on, I’m sure they will make a lot more sense than they do now. I don’t think this changes whether or not Shenmue 3 is a good or bad game, but it does perhaps improve the perception of 3’s narrative as part of the larger, overarching Shenmue narrative.