The faces look like fan made models.
Here's why Ryo looks weird:
1) Ryo now has more realistic features. Rather than creating a face based on just vertex positions and edge connections, this model is also digitally sculpted to add cheekbone, laugh-line, jawbone, and chin definition. He is less chubby-looking in the face because they have better character creation toolsets to work with today. It is a stranger face than we're used to, but it's not necessarily "lesser" than what came before it.
2) Unreal 4 has real-time lighting and shadowing, the original Shenmue games only had vertex lighting and shader tricks on characters to quickly simulate shadows. Modern engines generate texture maps to overlay as shadows. The shadows add so much gradation to his face that it only looks wrong cause we're so used to the older model and it's limitations. The new lighting system is likely also brightening his eyes to a hotter brown, cause that's the first thing I see as "off" compared to the original.
3) The texturing is sharper, so there's lots of small details that I can't tell if are meant to be pores or painterly style brush strokes.
4) There might be subsurface scattering in his skin, based on how bright and pink it is versus the unchanging, more yellowish skin from the original games. This simulates how light can enter a surface, such a skin or a leaf, and then brighten up the underlying materials. If you look into a mirror and press a flashlight into the back of your ear, you'll see the light scatter throughout your skin and make it glow bright pink.
These characters do look better, but it'll take a while to adjust to them since they've been updated to modern standards.