I would love this feature if we were getting a fully funded Shenmue III (or at the very least, something much more simplified/small scale). I think you're underestimating how much work has to be done to do this, though. First off, Ryo is really the only character in the game with a fully realized move-set. You'd have to multiply that by how many other characters will appear in the game, plus make the move-sets and fighting style unique. Then you're talking about a lot of modeling and animation work, and the fact they have to make an entirely new fighting system anyways. It's pretty much asking to make an entire fighting game, in addition to Shenmue III. Additionally, the fighting game genre is competitive and there's no margin for error, so that means that you'd need to invest in a lot of money into this feature.
I did like the ability to replay boss fights from Shenmue II with additional challenges, so I hope something like that can return and maybe be more fleshed out.