It's a widely known fact that Japanese companies very specifically only factor in domestic sales for their products.
Japan's insular as all hell, and have massively xenophobic laws and business practices.
That sounds like some bs you'd find on an unknown blog on a random website, old prejudices. All major companies from Japan, such as Nintendo and Sony, are successful because they care a lot about the western market.
No japanese game dev refrains from the western market because of Japans "xenophobic laws". It's most likely a mix between being afraid to get into legal trouble (it's difficult to resolve problems with customers from another country) and how to distribute overseas (handling foreign taxes etc.). Selling only in your country is easier because you speak the language and understand the law to a given extent. But most people also are overestimating how easy a basic thing like digital purchases functions, and they simply just shy away instead of learning it once for the long term benefit.