SEGA recently published an interview with one of the designers who worked on Shenmue II, Norikazu Hirai.
I've translated the part where he talks about his Shenmue work. It turns out that he is the person who was responsible for designing the Sword of Seven Stars. He also reveals that Yu Suzuki's original concept for it was actually a "Dagger" of Seven Stars!
Link to interview translation:
http://www.phantomriverstone.com/2018/02/interview-with-shenmue-ii-designer.html