I need to explain to you how Mario or A Hat in Time has more ways to interact with NPCs and the environment (and consequently break the game) than Shenmue? In those games your movement is governed by momentum and physics (which is already more complex than Ryo's movement), you can jump in several different ways, contextually interact with the environment, use items/powers that change the game world and introduce new mechanics, pick up and throw objects, enemies with actual AI and environmental navigation etc. Shenmue has one interact button!
Ah, the Interact button. One which has many uses. Either way, to address your first point comparing a 3D platformer and a 3D open world game set in the 80s in China:
Movement with velocity isn't really all that hard to achieve, you have set limits whereby you can be propelled in which ever direction you like. It is actually very simple. Something which has been done for many many years, even on old consoles which have constraints such as RAM or CPU cycles. It's really just as simple as that.
Shenmue in comparison uses inverse kinematics to ensure that all characters feet remain planted on the ground. Inherently due to the number of NPCs in both Bailu and Niaowu, compared to your example, this is more computationally expensive. Especially considering the higher poly count and shader instructions, across all instances.
You say actual AI, but I'm afraid I don't really know if you understand it, nevermind myself. The schedules present in Shenmue III, I'd say most certainly pass as simulation as far as the previous games are concerned. All NPCs have one and they are all unique and some of them have a certain degree of variance to them.
Take Shenhua as well for example, who develops the more you interact with her. All NPCs also have fairly decent pathfinding.
Your example is a 3D platformer with very little story, or at least not a story from more than 20 years ago, it is also not set in the real world, where there are functioning markets and a gambling setup.
Story is a very relevant point here. Every voice you hear has been cast for this game specifically and therefore has been paid as such, each line of text and dialogue has been translated and localized and audio has been designed, written and recorded, levels and models have been designed, modeled, textured and optionally animated.
All of these things cost real money which you as a developer would know and most certainly more than $500k which you've thrown around multiple times.
IIRC doesn't costs "thousands" to deploy to consoles, you only need to have a registered company and be accepted (they don't even ask for a build of the game), they give you a key to compile and there's that (same way you need a key for google or the appstore).
We're talking about testing and submitting a story-driven title with many moving parts. Not to mention, you have to pay for pressing physical discs. Of course they ask for builds when you are submitting a title.