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It would be hard for a Japanese company to do a World War 2 game tastefully without overlooking their involvement, what they did and what happened to them. It would be especially controversial unless they removed themselves from the game, given that Japan still denies some of the things they did.
It's still a bitter subject in Japan, which is why they make so little media involving that period and rarely talk about the period (outside of ambiguous apologies and statements).
Sorry all you boyo's but there's a possibility that shadow hearts might not be made anymore. Since Nautilus disbanded and the groups rights are being held by Azure. Anything can happen, if they make it or not. Lets just say we all have a slim chance SH4 will be made since Nautilus disbanded unless Azure does something since they hold their rights. I ALSO WANT SH4.