Those two studios for the game because it was Hardsuit's idea to make the game in the first place and TCR barely kept Paradox from canceling the have after they kicked Hardsuit out of the project.

I think it basically went like this (simplified):

Hardsuit: "Hey Paradox, we wanna make Bloodlines 2. We have everything worked out, we have the best possible writers involved, and it's a real passion project; here's our pitch."

Paradox: "Wow, that pitch convinced us completely! You get all the green lights in the world!"

Hardsuit: "Now keep in mind we've never done a project on this scale before so we'll need plenty of time—"

Paradox: "We set you on an extremely aggressive schedule. Surely that'll motivate you into delivering perfection!"

Hardsuit: "That's literally the exact opposite of what we need."

Paradox: "But it's the exact non-opposite of what you get. Now chop chop, we already gave the release date to the press."

Hardsuit: "We're not getting the game done in that timeframe."

Paradox: "No problem; we'll delay a little bit. Surely nobody will mind."

Hardsuit: "It'll take more than 'a little bit'. We told you that—"

Paradox: "Okay, sure, whatever, the game's canceled now. Don't call us back."

TCR: "Hey, can we try to salvage this? We really wanna see this made. But we'd like to throw away all of the writing, characters, and gameplay. Everything except the setting, really."

Paradox: "Okay, sounds reasonable. But make it snappy."

TCR: "We'd also like to change the name because what we can deliver won't really be a proper sequel to—"

Paradox: "Bloodlines 2 it is. Good discussion. Glad we talked about this."

TCR: "That's literally the exact opposite of what we asked for."

Paradox: "Can't hear you; too busy launching the sequel to one of the most beloved cult classics in the action RPG genre."

Customers: "Well, this is a pretty bad sequel. Decent game but they really shouldn't have called it Bloodlines 2. We're disappointed."

Paradox: "The only logical course of action is to swear to never release a non-strategy game ever again because nobody appreciates our art."

With the second paragraph I agree, it's a bad fit for a sequel and this is consensus (probably, I didn't enjoy Bloodlines much), even TCR thinks so. But is this a scale? Is Bloodlines 1 a lesser game with subpar gameplay because it's systems weren't as complex as other CRPGs? "Game" is just the term we stuck with, it doesn't mean that the fidelity of the gameplay, the mechanics and dynamics is paramount. If I value narrative, and it is, has become, a narrative medium, I very well might think that A Machine For Pigs did a better job.

And would hip hop be lesser music than jazz?

SOMA isn't a walking sim and I don't remember such situations in Still Wakes the Deep. The gameplay never stood in the way for me.