You honestly believe Masuda thinks watering down the game into a walking simulator will keep players engaged? You understand his concern is that they want to make sure people don't want to put down the game, right? His fear is that if children aren't engaged (i.e. they feel compelled to grind or don't know what to do next), they won't come back to the game—and he's absolutely right. If people feel like they can't make progress, they're not going to "tough it out" like they would back in '96. They'll move onto something else.

The goal isn't to make things stupid easy, but more accessible and streamlined. If you look at some of their competition (Minecraft, Fortnite, etc), they aren't any less complex, but they have absolute mastered the art of "pick up, play for a few minutes, put down, come back later." You can go mining in a cave for ten minutes in Minecraft and have a good experience, you can play a round of Fortnite and it'll be fun because it's different from the last one you played... That's what they're after. They want gameplay that's doable in short spurts and accessible to young audiences, but is also complex enough to engage them on a deeper level. It's why newer games have shifted focus to things like the Wild Area, Max Raid Battles, and Dynamax Adventures. They're really looking for a mechanic that people can keep coming back to and don't get tired of.

Have they knocked it out of the park and achieved that? Very debatable... but it's simply incorrect to imply that they want to make the games watered down, because they know that's not what kids want. The only game where they've really scaled things back was Let's Go, but that game's goal was very different from other mainline games, as it was literally a bridge between a mobile and console game and was specifically looking to teach younger players about the basics of Pokemon if they only knew it from Pokemon Go.