Could be the higher rez textures taking up more memory, but the Cold Steel games have been finnicky. Could be something on the programming side. McBurn in CS2 set PS Vitas on fire. The CS3 final dungeon lagged hard on PS4. Falcom says they can't fit more than 40 character models onscreen in a single shot without the game lagging. "PhyreEngine is not really equipped to support that", Kondo said.
I suspect that this ties into Nihon Falcom's management history. Nihon Falcom is run by chairman Masayuki Kato. Kondo is "the president" but really he's just the guy who leads development on the games and is the PR person. Kato is the one who actually runs the company. Kato has forbidden Falcom staff from doing interviews and interacting with the fans (out of the fear that fans would become upset if they heard that employees left the company). Kato forbade console development right when it was taking off in the late '80s and early '90s. Kato skimped out on his employee's salaries at a time when Falcom was making bank. In 1989, the staff of Nihon Falcom finally had enough and a mass exodus ensued, with only two programmers and a single composer remaining after everyone else walked out. It was a huge blow to Falcom's reputation and dampened their chances of being able to recruit new talent (not that Kato being unwilling to pay competitive salaries helped). Kato's policies means that Falcom churns through talent; good people aren't enticed to stay at Falcom, and fresh developers don't stay long enough for Falcom to cultivate good talent. (Click here for the full story)
Furthermore, Falcom's employee count hovers around 60 people, with the management being unwilling to use their profits to expand and hire more people. Kondo has said in an interview that he "doesn't want to manage people, he wants to make games", but I suspect that might just be him covering for Kato's unwillingness to spend extra money.
In an interview with Kondo last year, Kondo said that they wanted to use a different engine, but that the team was split between using Unreal, or making their own. Then, when Hajimari no Kiseki (the latest Trails game) was announced, Kondo said that the team is making a new engine. Probably because Kato doesn't want to pay royalties to Epic Games.
We'll see how that turns out, but I'm not optimistic. I don't pretend to know the skill of Falcom's programmers, but given Falcom's policies I'm not too confident that they have the talent to pull this off. Not that Unreal doesn't come with its own caveats. Unreal comes with a lot of lighting and shader effects stuff installed that is meant for photorealistic games, and is VERY difficult to remove unless you know what you're doing, which is unfortunately why a lot of games using a colorful and abstract cartoon/anime artstyle tend to look like washed out grey concrete, see Darksiders 3 and the upcoming Tales of Arise. If the devs of those games couldn't manage to pull out those systems, I doubt Falcom could either, so I guess the one good thing here is that our Trails games aren't going to look like washed out grey concrete), but... yeah.
Fingers crossed.