Here's the part about political correctness as posted on the Niche Gamer website, so those wanting to just read it can do so. Do take note of the very first line before forming your full opinion.
Editor’s Note: The following information utilizes unverified third party translation.
Among the documentation includes a presentation on political correctness and advertising materials, and how to avoid drama and controversy. This includes avoiding the use of language that can be deemed as discriminatory or prejudice, and will result in new guidelines for each region’s PR and advertising material creators.
Even so, some of the documentation discusses what to do and what to avoid as though it applied to game designers, though this may be the result of how it was translated into English. This includes gender neutral cosmetic options, only featuring certain ethnicities or portraying them as unequal or stereotypical, and avoiding sexual or obscene language and jokes unless inevitable based on the context of a story or narrative.
Sexuality, LGBTQ, and women were also discussed. One slide features The Last of Us Part II and Shadow of the Tomb Raider as being positive examples of LGBTQ characters; and that such characters should be portrayed as appealing as male characters (and promoted in the same way). Capcom do note that certain regions view LGBTQ characters negatively.
Meanwhile, Nintendo’s Princess Peach and Zelda were used as examples of negative stereotypes of women due to being damsels in distress. This is in spite of the image used for Zelda being from Breath of the Wild; where the character takes a more pro-active role.
The presentation also asks to defer to the localizers of different regions and vendors to make sure certain content is appropriate. Examples include Arab localization and content featuring pigs, the use of Happy Holidays over Merry Christmas, and numbers or expressions that may refer to the Nazi party.
The presentation recommends characters that appeal to a wide range of people, with male and female player characters being treated the same within a video game. Custom characters should be able to have any haircut or facial hair, and various body types.
Sex appeal, such as bikini costumes or lewd poses and costumes, should be equal between men and women, and serve a purpose in the context of the story. However, costumes cannot appeal to only one kind of user base, such as only one gender.
Capcom used their own games as examples of this. While a shirtless costume for Street Fighter‘s Ryu was fine, R. Mika’s butt-smashing super move was not. Cases where an armor set in Monster Hunter World shows more skin on the female character was also seen as a bad thing.
Likewise, while Spider-Man Miles Morales was seen as a positive portrayal of non-white races, while Street Fighter‘s Dee Jay wearing a Rastafarian hat was not.
It should be noted that while this documentation indicates a presentation was likely given, it is unknown how Capcom have acted based on it. In the US, certain diversity and political correctness courses for businesses are mandatory under state law, or provide incentives such as lower taxes.
Similar may have occurred with Capcom in Japan; as a western investor discovering no discussion on political correctness could cause them to create outcry.