As a preface, in case my wall of text confuses you, I am agreeing with you. I just start venting about others as it goes on.
It is funny because they probably won't get sued, or at least wouldn't lose. It's petty and they don't do anything wrong by including things.
It is literally about image and nothing more. A tiny bit of it is weighing options of sales. Who they think will be the least mad.
Obviously they know parents are going to ignore ESRB, so they take that extra step.
They basically look at it as "do we keep this and get the negative press that already circulated from the Japanese release from misinformation about what it is & what you do? In this instance, people don't buy it because of what we kept in and the negative word of mouth spreads.
Or, do we remove or alter it, angering purists, but avoiding the bulk of the negative press, some people never knowing it was there to begin with & moat not caring either way as long as they play the game?"
Now, Nintendo will never know who the majority & minority is. It is a gamble they have to take. People don't understand that because they assume it is as simple as ignoring it if you don't want it.
It is like everyone forgot Hot Coffee. While obviously more lewd than this, that minigame in San Andreas WAS NOT EVEN ACCESSIBLE unless you hacked it, yet that got taken to court given an AO rating and so on. We no longer live in a world with Jack Thompson starting nonsense, but the possibility of another rising from his ashes is always there.
Do the people upset about Fates also wish San Andreas kept the AO rating and Hot Coffee so they could play the sex minigame and "decide for themselves" if it is okay? You know, the rating no system allowed anyway? Maybe argue it was a different time, but my point stands that no. It isn't up to us to decide. It was never up to is to decide. Nintendo is not the bad guy, they are just afraid. People shouldn't blame them for being afraid of loud and powerful idiots.
I'm sure every person here censors themselves or talks differently around certain people. You don't always curse around every person, or talk about certain things, maybe even talk polite around some or withhold information to protect others or yourself. Why? They can just ignore you, right? Or some other reason? Worried about pleasing different people and no about others?