Sexuality =/= sexualization and vice versa. Sexualization is dehumanizing by definition, showing and treating people or characters as nothing more than something to obsess and fantasize over rather than human beings with their own needs and motivations apart from desire. While there is nothing inherently wrong with sexuality and sex-positivity in the right context, it often distracts and detracts from its surroundings when in the wrong place. Attention is a zero-sum game, after all; put stripteases and bouncing titties everywhere and people will be thinking more about sex and less about... anything else. It doesn't matter how intriguing a character's psychology is if the camera keeps panning to her ass every five seconds, by that point the only thing people will care about is the ass itself. Which would be fine... if it was porn. Besides, excessive exposure to one-dimensionally sexualized characters often translates to a distorted view of real people, often unconsciously. People's thought patterns are influenced by the ideas they consume, and constant exposure to escapism without a reality check eventually becomes a feedback loop that forsakes everything else for more pleasure.

And there's nothing wrong with making a work of art more accessible to a wider audience. Some people are just squicked out by intrusive sexualization, myself included. It's like a pop-up ad that you can't block. Sex and violence isn't and shouldn't be a main selling point of Xenoblade; I'd assume the main drawing points would be beautiful environments, a rich, enjoyable, and thought-provoking story, and the ability to ride around in a giant transformable robot. Cutting down on the fluff isn't harmful in the slightest if it means becoming desirable by more people.

That's not to say I'm not concerned about censorship in Xenoblade, but the only censorship I'm really concerned about is the intellectual kind; if they change any of the religious or philosophical parts. I couldn't care less if they changed Lin's outfits or made a character less violent. To that I'd say good riddance, there are plenty of escapist outlets out there as it is.