otakun is correct.
It really doesn't matter how the developer wants to market it.
Blizzard tried to repeal the "MOBA" tag when Heroes of the Storm released. They said that it was not a MOBA, but a "Hero Brawler". How many people do you think today call it that? Do you think that stuck? It didn't. It's a damn MOBA, and people refer to it as one.
MMORPG does not necessarily mean you have to be actively engaging in activities with a huge amount of people all at once in an large open world. It simply refers to the idea that there is a large number of people within your virtual space. They could be running their own dungeon, sitting in the hub/town, being afk. It doesn't really matter.
Just because PSO2 is instanced doesn't mean it is exempt from being classified as a virtual space being inhabited by a large number of players.
Nobody actively interacts with more than a handful of people at one time out of sheer lack of capability anyway, it's stupid to insinuate that in order for a game to classify as an MMORPG, you must be indulging in some sort of activity that requires 100000 people out of necessity for the genre title.
As for which Phantasy Star is better...I personally think that PSU was better than PSO2. It's a pretty tight race between PSO Ep1&2 and PSU because they did things so differently, it's tough to compare them, but I'd say PSO edges out PSU out of sheer nostalgia and how much more "mysterious" and fun it was.
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