I recently found this very impressive demo of Longmire Locomotion's Advanced Locomotion System V1 for Unreal4 . With some minor adjustments I feel it would perfect for Shenmue 3 imo.
Briefly my idea of Shenmue 3 movement would be as follows:
Full 360 3d movement and 360 camera movement by default, aka Yakuza, LA noire etc BUT; if you partially depress the L2 trigger Ryo goes into 'strafe style' movement similar to a third person shooter, with the camera moving directly behind Ryo in the classic style of the originals, aka. with FULL REAR PROFILE (NOT OVERSHOULDER). you then control Ryo's gaze with the right stick much like the originals except you wouldn't lose full movement control in the process.
When the L trigger is fully depressed you zoom into first person mode where you can lock onto objects and interact with them just like the originals. (you can also stay locked into first person mode by pressing R3 without needing to keep L2 depressed)
Dedicated jumping wouldn't be necessary, but there would be many contextual based interactions, like climbing and vaulting which you perform by pressing R2.
Exact controls:
L stick - 360 3d movement walk/jog
R stick - 360 camera, (controls gaze while in L2 strafe mode)
L2 -trigger - strafe movement style, camera zoom/lock on, first person if depressed fully
R2- trigger - hold to sprint while pushing forward on L stick, also allows you to push through crowds, also other contextual movement based actions (vaulting, climbing ect.)
R3 - toggle into first person mode (without needing to hold L2)
L1 - view wrist watch, then press square to activate the back-light, or press x to initiate time-skip feature.
R1- press to look in direction of NPC partner, double tap to call NPC partner, keep button held when next to Shenhua to hold her hand and lead her
X - speak, confirm, read signs - hold to bring up dialogue tree
O- assign inventory object to this button to show to npcs, to get more information about it, or give as gift or other.
Square - general context based interaction, e.g. open doors, interact with vendors, insert sword of seven stars into plinth etc.
Triangle - inventory, hold to view move list
Options - pause
Touch pad button - open notebook, turn pages by swiping left/right
hold touch pad button to open map
D-pad - classic dreamcast movement