My only theory is maybe Microsoft was given a beta source code or something.
I also think Microsoft was given an earlier version because some of the textures were wrong on Xbox:
http://shenmuedojo.net/new/extras/xboxvsdreamcast/SII.010.DCc.jpg
http://shenmuedojo.net/new/extras/xboxvsdreamcast/SII.010.XBc.jpg
http://shenmuedojo.net/new/extras/xboxvsdreamcast/SII.061.DC.jpg
http://shenmuedojo.net/new/extras/xboxvsdreamcast/SII.061.XB.jpg
I can't believe I just quoted my own images :lol: . Can't believe that was back in 2004, but it was fun checking for differences on my CRT tv and both consoles plugged into my VCR. With the news of Shenmue III I've been spending some time back on Shenmue II only this time comparing the differences on split-screen mode on my flat screen:
https://pbs.twimg.com/media/CJvBdWUWoAAhrKk.jpg
I've even found some more differences that I missed back then.