What happened was that Osaka was working under the belief that they would be using Luminous as their engine, so they made a ton of assets and systems in an API which is not a game engine by any means of the word. They expected this work to carry over, and I think they might have gotten their hands on a build of Luminous for a brief period of time although no interviews from that year of development seem to say as much.
When it was clear Luminous was not going to be ready to use as an engine, the decision was made that the FFXV team would get the engine and its engineers to work on both the development of the game and the engine at the same time. This meant Osaka had to find a new engine, learn how to use it, and find a way to get that work that they did to transfer over into that new engine. Safe to say that much of that work was probably rebuilt from the ground up...
It is pretty clear that in 2014 after the switch to Unreal Engine 4, they spent that time outsourcing models and assets to try and speed up development while the development team got a crash course on UE4. The work they got back from those companies was absolute trash, so that meant that not only did they have to rebuild their gameplay systems, they also had to do all of that outsourced work over themselves.
2015 is probably when they went through a huge period of restructuring and refocusing on what KH3 should have and what it needed to be in order for it to make its deadline of 2018. Multiplayer was likely a sacrifice in that plan.
With the game being out, though, I’m sure they still intend to revisit the idea later on or just intend to implement it in a future project. Verum Rex seems like it was especially built for online play, and I can’t help but see the Gummi maps and think that they are so massive because the plan was to have more ships flying around. If nothing else, KH3 would benefit from having Gummi Ship Blueprints be shareable online.