Actually, think this update was quite good. The art style is great as always, and it's nice to see some new sprites.
I am glad to see the MC branching out with other characters, like the blacksmith. I think all are interesting, and his concern over hurting Sunny, is honest and realistic.
AI is not the answer. AI is basically the enemy of creatives. Not saying it's all bad, but for artists, it just produces copycat content, with no-originality. Since AI scrapes millions of images and stories, all you get is the average of everything, which makes it all bland and thoughtless. Even calling it AI is a misnomer, since AI implies "intelligence". Really, it is taking prompts and averaging all the content it has scraped from legitimate artists and trying to copy many at once. It's rather unethical really to take artists hard-earned creativity, copy the style, and sell it for billions of dollars. Oh well, capitalism.
Anyway, I think the update length was reasonable. No need to change anything.