I'll keep this as spoiler-free as I can, but it really is a great game, I've cleared it. Anyway...
It all comes down to the Magypsies. They're aliens that look like drag queens...Mother games are weird.
You change the name, it's censorship.
You leave the name, Twitter explodes about an "anti-Romani slur."
You leave the sprites alone, it's anti-tranny stereotypes.
You change the sprites, it's LGBT erasure.
Nintendo's in a bind. So they just don't release it, because dealing with the "give us Mother 3" crowd is better than dealing with the SJW Twitter mob.
Man that Magypsies shit was hilarious, and gross. You're probably right if we're talking about why they don't release it today, but back when it was new cancel culture and social media wasn't quite the thing it is now.
I should've clarified--they waited too long, and now cancel culture is a thing.
They should have struck while the iron was hot.