@BloodyKyona First, I recommend dialing it back just a bit. I know it's a touchy subject, but it's entirely possible to have a conversation about it in a calm and civil manner. If nothing else, I know I'm at least capable of it, and I would imagine most others are as well, so if we ARE going to continue the discussion, we need to do so with a bit less hot-bloodedness.
Second, I said what I said actually taking into account FFXIV producer and director, Naoki Yoshida's very same sentiments on the matter, and FFXIV is a Japanese-made game, however much it may be a globally marketed product. So out goes the "western culture" standpoint. Really won't even bring Lalafells into it as it's simply another flavor of the very same argument.
Art imitates life, and believe me, that statement holds true in both good and bad ways, and there are good and bad ways to go about it. I believe there's nothing wrong with accurate depiction of historical events, even when they may touch upon old wounds, but even in doing so, I would not be okay with a frivolous or glorified depiction of less-than-pleasant things - historically true or realistically accurate - especially where and when children and/or child-like characters are involved, and I feel most people would share that sentiment.
Really, it's simply about drawing the line between artistic freedom and morality/ethics. Literally "what feels okay or not". Yeah, the line gets really grey sometimes, and there's a lot of different things that different people may have different opinions or levels of comfort with across different regions or cultures. . . see where I'm going with that one? One thing's for certain though, most just aren't too crazy about depictions of harm or violent threat to children, however much PSO2 personally has walked that line before.
And yes, I agree a short character doesn't inherently imply being a child - Io, Klariskrays, Sarah, and Stratos are testaments to that. But the costumes initially referred to are just that one step beyond those characters, and well past the "grey" of what may/may not be considered okay. And at its most simplest, the bottom line is (at least for the devs) to make a product that is as marketable as possible, and that can sometimes result in a much more narrow creative space/limitation than we end-users may know, understand, or even personally like. Like it or not, "okay for JP" just doesn't equal "okay for [the other 30+ countries that the Global version is marketed to]".