I wouldn't change to Dragon Engine for following games - but that engine had all the components to make a Shenmue game off the shelf. It has a good if brawlery fight engine, large number of NPCs that move around the city, complex conversation options and side quests, mini games, fully voiced NPCs (on the whole - depends on the game some are more text based than others but thats not an engine limitation), large areas without loading screens (I don't know if you've played 6, Kiwami 2 or Judgement but the older games run on a previous version of the engine that runs on PS3 and 4 whereas the newer ones updated the engine to run on PS4 only). It does depend how difficult it is to work with but as its a complete engine you could start making the game including areas etc. and it would be very playable. Afterwhich you can tweak the fighting engine to work for it rather than starting with a giant sandbox and having to spend time writing concepts like conversations into the engine.
The game and a lot of its visual astetics suit Shenmue very well (I know they aren't the same game by any stretch but Unreal Engine was developed originally for FPS and Action games. Yakuza is a hell of a lot closer than Unreal Tournament to Shenmue). It's like saying Sega have a great Baseball game and you'd use that to make a cricket game.
I felt Yu spent a whole heap of time and money making "Shenmue" in the unreal engine whereas if they'd used the Yakuza engine they could of been 6 months on down the line from where they started day 1.
That said however the Dragon Engine has been developed to make Yakuza games only. From memory I don't ever recall any area you can walk over other than concrete or steps so its possible its not very tuned to do non urban environments. Also I don't know how much documentation would of be written to allow a group of people who know nothing about it to use it.
However other than forklifts I can't think of something Shenmue does from a technical standpoint that the Yakuza games haven't done.