I'll somewhat buy the different engines in the modes contributing to the decision to stop gallery, but Helius has heavily alluded fewer offline features is to make it harder to crack. Either way, this isn't really an issue. It was killed ages ago.
To maybe put a nail in this one, here's the point to saying it's scrapped.
Within a minute, seconds really, Helius says Paralogue is scrapped. He then links that to not wanting to invest in an sfw title, with no one else bringing up the sfw title in the meantime so that link is entirely his own. Obviously this gets a bad reaction from people as stuff being canned is never a good sign.
It's only after the reaction and with Miya's involvement that things are then backtracked. You work with Miya so I won't spend too much time talking shit on them, but after following this a while I've come to learn to take the things Miya says with a heavy grain of salt.
Anyway, no one denies that the campaign was in progress before this statement, is no longer in progress after this statement, and has no definite plans of work at this time. Given the sharp backtrack and that the situation alone fits a decent definition of cancelled it's hard to argue that saying it's not cancelled is anything more than splitting hairs. I mean, "It's not cancelled, we're just no longer working on it" doesn't really sell. I'm still going to call that cancelled.
As for the Xeno's thing.
It seems like it would be a rushed decision to base it off whats seen in the beta considering there's been less than 30 players on average. There's no shortage of empty servers in both modes when you boot it up, simply because there's no one really playing anymore. I've only seen 1 other person total between both.
It's hard to buy that with the censorship angle because we know he does receive pressure on things like this, xenos and Galatea. The hound rework was steam pushback on it being too dog like. For Gala,
Here and
then deleted here we can see Patreon disliking it, and with Galatea getting her special mode of approval from steam it's fairly certain there's pressure there too. He's since been less open about it but clearly there's still issues.
That also leaves the issue of her being designed to look 10.
No way that stays on steam without a definitive rework with Helius's history of describing her as an actual child.