Since the creator's said it's the reason they aren't releasing it in the West, it's a perfectly logical conclusion to jump to
I don't think the SJW's need any more white kngihts
I'm not white knighting anyone, but sure go ahead and think that. There were hardly any backlashes regarding this game prior to this drama, and even if there was, what is to stop them from releasing the game? They release these kind of games all the time. KT is being kind of ridiculous.
There is no current active boycott or outrage against DOAX, so that is not the issue here.
What they are alluding to is that there is now a "culture of fear" when it comes to what mediums can and can't do with creative works in the west prior to in the past, and they said it isn't worth it. If you follow the politics and controversies of the gaming spheres, academic/college campuses, comedy, books, etc then this becomes pretty clear that some things have changed when it comes to adult/"sensitive" content (for better or for worse is up to you). This is also alluded in other mediums, like with South Park tackling into "Political Correctness" and more movements rising up against it. It's starting to become a topic not only in gaming but in other areas as well, and with these controversies becoming more common the developers are saying that they want no participation in that discussion and subsequently pulled out.
Whether you believe that or not is obviously up to you personally, but do note that there wasn't a boycott or outrage prior in particular, but that simpler terms the market may have changed and is much likelier to trigger controversies instead of before. On the flipside, it should also be noted that handheld DOAX (Paradise I think?) was received pretty poorly in comparison to the rest of the series.
This isn't the first time they have talked about this either or a random occurrence: during an interview with Team Ninja on the
venturebeat they talked about this exact same issue, during the times of the DOA5 constumes and their own thoughts on "gender representation" and that they are closely paying attention to it. So if it's seen as just an excuse then it was an excuse a year in the making, and wasn't just cooked up on the spot. Don't forget, Tecmo Koei was put on the spotlight for Cia (never understood this controversy) despite there being no real issue and the cast of characters being "diverse" and was put on the spotlight for DOA5 optional downloadable costumes.
Complete speculation, but I feel that in this day and age, considering some of the controversies in the past on other media forms for their "content" I can totally see DOAX3 being up to bat this time around for the old blogger outrage machine had it been released from the usual suspects. Obviously we won't be able to see if that's the case now, since you will have to import it if you want it.