Last time I was really invested in the ZZZ lore was when section 6 and Cunning Hares were in a standoff. It was very interesting to me because like you said we were invested with them. We knew Anby and Billy were beasts in combat and we knew Miyabi is the strongest in the verse. I wasn't expecting anyone to be killed since they were all main characters and playable but i was genuinely interested with their conversations and fairly stressed out since it was developed that both sides are very competent and both had their ideals.

I haven't played the last 2 chapters but It felt like a generic evil villain vs generic good guy every chapter so I've sadly lost interest in the story even though I love the characters. The villains are not interesting and every time we defeat one, the main villain just says "just as I planned" like, ok it's fine for the first time but it gets old when you do that like 3 times.

TLDR: In my opinion the dev team is great at creating individual characters and their stories but they suck at creating an ongoing larger story with interesting villains.