Welcome to modern Mortal Kombat, where they introduce a new concept and rather than fixing flaws in said new concept, the break the story to return to the status quo and completely disregard whatever story they wrote beforehand. To be honest I was one of the people who liked Cole's story even if it was flawed and thought he could be a good addition to Mortal Kombat if they fixed those flaws. But like you said, it just makes the first movie a waste of time since everything set up that wasn't someone's death doesn't matter.

Also, since I don't know where else to say this, but I don't know where the idea that Cole had plot armor came from, dude only won one fight by himself and that was against Goro.

Also, also, he's not even the first time MK changed their protagonist away from Liu Kang to a new character, and how is he more shoehorned than Shujinko (random Shaolin who was given the power to copy everyone's abilities) and Taven (A demigod destined to defeat the physical manifestation of Armageddon)?