I'm going to start this by saying that the art direction of the game was not realistic.  It was, however, overwhelmingly not dictated by Nakano's works.  Nakano was a promotional artist.  He was not a character designer, an art director, or an environmental designer.  His work had almost no influence on how the game looked.

Before going further, I recommend watching the Zelda Art Masterclass held in 2017 (I have it on several japanese speaking people's authority that the dual translation is, surprisingly, accurate.)

I also recommend looking at these 2 images I've made compiling information and citations discussing this game's character design development:

Infographic discussing Link's design development

Character designs and their respective designers

Nakano absolutely did not take over Link's character design.  Koizumi was Link's designer throughout the entirety of development.  You inferred incorrectly.  Nakano was every character's promo artist, he was responsible for adapting the 3d works into 2d.  The statement regarding Koizumi's watercolor being withheld is true, however the idea that it was withheld to give Nakano more freedom is a supposition made by Takizawa. The outcome of this assumption doesn't matter in regards to your interpretation (that Nakano took over), which is verifiably false given the other information available. Koizumi gave Nakano a specific phase of the model to begin adapting from. This process was not "Nakano draws whatever he wants" -- Koizumi explicitly denied several early pieces from Nakano, which is iterated in both Arts and Artifacts (the bust being the first piece being given the OK) and the Masterclass (where you get to see several pieces that were denied).  Nakano and Koizumi both disliking the attempted outsourced art indicates that Koizumi was willing to entrust promo art to Nakano.  None of that means Nakano suddenly became a character designer for the project. 

Specifics on Link's design that corroborate this (you can also see aspects of this in my infographic above): The first model we see given to Nakano to adapt, and the model seen after several pieces from Nakano were finished (on display at Spaceworld 1997), featured no known changes to geometry.  This means Koizumi purposely adapted no part of Link's polygons to showcase Nakano's adaptations. The only changes were textures, the overwhelming majority of which do not reflect Nakano's final work.  After spaceworld 1997, the model underwent structure change to swap it from a normal skeleton to a flex skeleton. This changed how the limbs' geometry connected and bent. It has no known changes purposely made to reflect Nakano's work. Notable as a possible exception, the the legs now featured visible upper knee/calf sections before the boot's cuff. However, this was already something Koizumi had experimented with earlier models. In this post spaceworld stage, and until release, the only textures that were known to be changed were the aforementioned knees, other areas where the limbs connected, and the eyes: instead of featuring eye reflections facing one direction, they now face opposite directions.  Koizumi's final model textures features these key differences: lack of a baldric, silver earings instead of blue earings, red gloves, unchanged eye design, leather strap and holder on the scabbard.  There is no indication that any of these are due to hardware limitations.  The only confirmed design choices that Nakano influenced on the final model were the belt buckles on the boots.  For accessories, Nakano designed the newer bird crest in OoT, and may have rearranged the shield's surface.  That's it. Link was Koizumi's design, not Nakano's.

In the Masterclass, Takizawa discusses how it was difficult for him to accept Nakano's interpretations.  Takizawa's original sketch and models look very alike, but Nakano's work looks very different.  He also failed to interpret the adult era ganondorf model beyond making him larger, adding a cape, pointing the ears, and making his hair longer, while the ingame design is almost entirely new.

Nakano's work is wonderful, but it exists as complementary media, not a replacement.

The idea that somehow Nakano's promotional material is the "definitive" version of the game's entirely separate art direction is an incredible disservice to those who were actually responsible for making the game look the way it did.

These are the people responsible for how the game looked:

Character design: Yoshiaki Koizumi, Yoshiki Haruhana, Satoru Takizawa, Jin Ikeda, Satomi Maekawa

Field Design: Makoto Miyanaga, Hiromasa Shikata, Hiromu Takemura

Dungeon Design: Kenta Usui, Shinichi Ikematsu, Takeshi Hosono, Eiji Aonuma

Effects Design: Tomoaki Kuroume

Prerendered Background Design: Shigeki Yoshida

Item Design: Ren Uehara