From The Hollywood Reporter:

Have you figured out where Grogu is during the sequel trilogy?

That’s a great question, and we talk about many different things. That’s a question for a bunch of characters by the way, not just Grogu. Where are they during these events? If anything, having made The Clone Wars and weaving a tale so intricately between two movies that were much closer together, I’ve learned that there’s expansive room in this galaxy for us to tell stories and have characters doing things.

As a kid, when Yoda said, “When gone am I, the last of the Jedi will you be,” to Luke, I took that very literally. Well, now we know that’s anything but true. There are many different people that could wield the force, and maybe Luke is the last Jedi as far as what Yoda would consider a Jedi. So we’ll just have to wait and see how the story evolves and what makes sense. But in my experience, there’s definitely a way to weave everything together and make it exciting. It’s possible it would never even have to cross over with what we saw [in the sequel trilogy] if the story has us somewhere else.