I think you are reading too much into this.
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Rubber bullets are an even worse choice for censorship purposes because they have the capacity to seriously maim with lifelong disabilities. They aren't "let's not kill anyone" plot devices.
https://www.healthline.com/health/rubber-bullet-wound
They weren't even introduced until the 1970s which makes them stick out even more as a bizarre choice for a Wild West-inspired duel.
The rubber bullet thing is real. Not every duel was a blood feud with the loser intended to die so the substitution of non-lethal ammo (not necessarily rubber bullets) would be made. Considering most people get their "history" of the 19th century western US from Hollywood and Hollywood needs drama to sell tickets, it's not surprising most people aren't aware.
But agree that a good chunk of the MSQ was written for immature audiences, which is likely why it doesn't sit well with such a large part of the player base.
There's been a shift in the last couple of years in gaming where developers for some inexplicable reason feel the need to ensure that their games have to be ideologically consistent with what they wish to see in real life. Can't have slavery in a game because it might be seen as an endorsement of it irl, can't have injustice, racism, sexual violence etc. because it might trigger someone. Nothing adult, nothing real, everything has to be idealised and safe. Only black and white, no grey.
Remember going from ARR to HW and getting absolutely shafted? There was no simple solution of just talking it out or solving our differences with tacos. The enemy was competent and we got outplayed, it was unfair, it was frustrating, there was nothing we could do about it, and it was great. We need more of that.
Dawntrail as a whole feels like they wanted to target a younger audience, but that confuses me on two fronts.
1) the audience for the game isn't getting any younger, so why target anyone other than the people who've supported this game this far.
2) This new younger audience still has to make it through the Hydaelyn v Zodiark storyline to get to Dawntrail. Which means they'll see themes of racial prejudice, wartorn refugees, imperialism, slavery, religious dogmatism, warmongering tyrants, attempted genocide, cults of personality, suicide, prostitution, political assassinations, child soldiers, mass death, dismemberment, nihilism, existentialism, and even being forced to end the life of someone you hold dear for the greater good.
This game can get dark in between the cute bunny people, and eccentric inspectors. To see that get downgraded to "I want to be the dawnservant because I like smiling, and I want to see everyone else smile too, because when you smile I smile. So I'll try my best to make everyone happy! Because that's my ninja way. Believe it!" is disappointing, and at times downright insulting (especially because that quote is only a slight exaggeration)
Yep, about mid-July 1970.
https://trove.nla.gov.au/newspaper/article/110332977