If they tied it to a stamina bar (seperate) that impacted your moves/power that could work.
Or they could take it out if that was too much of a pain.
I think the levelling of moves was ok in itself as it did impact attack power. I think (while I see the clamour for it to be like the old system) it will likely stay similar to what it is. Maybe they could present it like the older games? But for me sparring with a monk worked nicely as that's generally what you do in martial arts, you train with a person. Maybe they could have both? Train alone on moves and then with a partner and you choose?
They should create a Hunger system similar to the one in Kingdom Come Deliverance wich gives Buffs and Debuffs.
This would imply having a Health bar and a Stamina bar.
During the day Ryo would have to eat and drink and sleep to keep himself satiated, hidrated and rested.
If Ryo didn't eat is stamina would deplete faster, he would loose health faster and he would cause less damage.
(Debuffs to Stamina / Health / Damage)
If Ryo doesn't drink he would run slower and his moves would also become slower and QTE's would become faster to reduce players chance of success.
(Debuff Speed)
If Ryo doesn't rest, his health and stamina won't regenerate.
(Debuffs all Stats (Health / Stamina / Speed / Damage)
The type of foods or drinks could also influence Ryo's stats:
Healthy Foods = Replenish Hunger slower, but gives more Buffs.
Unhealthy Foods = Replenish Hunger faster, but gives more Debuffs.
Healthy Drinks = Replenish Thirst slower, but gives more Buffs.
Unhealthy Drinks = Replenish Thirst faster, but gives more Debuffs.
If they wanted to add even more realism and more RPG mechanics they could also add injuries.
If Ryo takes a lot of damage he would get injuries and in order to cure them he would have to use bandages, medicine, rest or even go to the doctor. (Injuries would also influence Ryo's stats)
(Ryo's eating habits could also influence his chances of getting injured. Healthy eating habbits reduce chances of Ryo getting injured and Unhealthy eating habbits increase chances of Ryo getting injured).
This system would probably be a lot of work but at the same time would be much more realistic and would make the gameplay much more immersive and dinamic, but I'm also affraid that it would make Shemue loose its arcade feeling associated with Sega and Yu Suzuki.