I think the fact that the theme is still under consideration is perfectly appropriate and to be expected. Utada just returned to professional output this year, and her attention has been entirely centered around the production and promotion of
Fantome. Add to that the fact that KH3 is still in the thick of development and probably won't see release for another year (at least), and the fact that we now have two confirmations that the answer from Utada's team isn't flat-out rejection and I'd say we're in good shape to see her come back for KH3.
Also, people are still making much-ado about nothing over an interview Utada gave 7 years ago when KH3 wasn't even a blip on the radar. Disney never approached her about the game, Utada was obviously exhausted with
everything during TITO promotion, and even then her best answer was that she "probably" wouldn't return (literally, "I don't know"). The idea that Hikki didn't enjoy writing songs for KH is really a myth; yes, she finds the process of translation stressful, but she also loves singing "Simple & Clean" (seriously, she sang it for her 20th birthday celebration) and has expressed how super proud she is of her theme songs. Like, during that same interview with JETAANY, she talks a lot about the challenges of self-producing an album:
I wanted it to be “me,†but not as “me†as Exodus, because I did all the tracks, like most of the track making on that, and I was so sick of that track making process...by the end of Exodus I was just going, “ahh, can someone else do this for me but not be a loser, like...not be Timbaland, but do this for me, like I want to work with a track maker,†that’s what I told IDJ..
But it was after
Exodus that Utada had the largest hand in producing her Japanese albums and for
Fantome she returned to entirely self-producing. I'm not saying Utada is a liar, I think she's just human and doesn't do PR so at any point in time you might get different reactions from her regarding her career and her work.
I'm not in any way criticizing KHInsider for quoting from this article because it was kind of the last official word we got on the issue, but it always seems to prompt a reaction within the fanbase that doesn't take into account the context of the time and place. And I think it would be misguided for people to reach the conclusion that Utada doesn't feel a connection to the KH franchise or, more specifically, the fans who know her because of it. She's been very clear that she's aware of the impact it has had on her career and especially her prominence in the West, and I think she appreciates the association she has with the series in terms of the level of enthusiasm surrounding it.
Anyhow, my bias is firmly that if they can't get her back for some reason, they should just use an instrumental of some sort, maybe something which blends the orchestrated "Hikari" and "Passion" tracks. As far as I'm concerned, those are the theme songs for this saga, and it would be a creative obstacle to try and associate a new singer with the franchise at this stage. Besides, it would be like rubbing salt in the wounds of long-term fans. There's an emotional signature to those tracks which would be lost. KH3 is about the culmination of the journey of every game that came before it: the theme song needs to invoke that.
That being said if they just wanted to license and use "Michi" I'd be down.