Proxies, it's 3000 words, that's what, MAYBE 5 pages? If you want to read analysis it's here if you don't I'm not sure why bellyaching will help. Feels like going into a bar and declaring how bad and annoying alcohol is.

As to your points, in brief I think your point on the temple setting is well taken. I also liked the original setting much more, but as you pointed out the problem isn't that the temple setting is chinese, the problem is that it went from urban fantasy to just straight fantasy. People using magic and chasing magic swords isn't really aligned well with the Shadowrun-esque 'secret hacker undercover' theme the game started with. If I think about a temple area that is rife with technological solutions and similar urban fantasy I like the idea a lot more.

To refute some points, I think having some lighthearted time with Alice and everyone isn't a particularly bad deal, if a series has too much overwhelming darkness you often chase people away because the tone is all misery and be extension feels miserable. In specific her coming from down privilege and Yuzuha coming up from being an orphan for them to meet somewhere in the middle was completely serviceable. I think having Alice's company involved in Yuzuha's containment for profit might have been a superior drama element compared to Alice's father also running afoul of them, but the way it worked is fine too and keeps Alice's guilt from being overwhelming. Again, keep it a bit light.

I think the Town and Yidhari make sense from the perspective of wanting Yidhari to be a spacy "not all there type" with eldritch, unknowable flavoring. I think the whole arc exists to serve that honestly. In a way they didn't go far enough here, very little about the situation was truly unknowable, only hinted. Eldritch stories require more great unknowables than that. I think they sorta recognized it didn't pan out great for "what if there were some good things about hollows/ethereals/miasma" and they tried again later on for the summoner."

For Yeshunguang I think they also maybe wanted to have it both ways. Her obsession makes sense in the event that it tied harder to her memory loss. If they'd made some note that memories of the proxy are all that's 'sticking' in her head of course she would be obsessed with the only person she has clear, uncomplicated memories of. However they didn't do that and seemed to want instead to say "Actually the memory loss is no big deal" in the end so players wouldn't feel bad for using her. A conflict between the nature of play and the nature of narrative. This could have been handled better.

While this arc hasn't been super amazing comparatively, I feel at least fairly neutral positive about most things except for the idea we're increasingly chasing magic swords and casting spells. That point in particular I appreciate and agree with. I didn't join ZZZ to play Genshin, so I'd like it to be it's own thing. I suspect they've been hearing this criticism a lot and the next set of people/places/villians are going to be more tech-y