I don’t really think TM Black was a thematic misstep, Benji. It was just different.
I don't think any of the serial killer/asylum stuff works with the world that the levels represent. Which are mostly kinda blah, or just strange, and most of them are way too big that you wind up chasing a single dude around. And stuff like Sweet Tooth's robot makes even less sense.
Jaffe thought it would have been nice to have gotten another six months or so on the levels especially but Sony needed
Black out that summer. And there were high intentions for a sequel, so they weren't as concerned about cutting stuff thinking they'd get back to it in a bigger and better sequel, some of which later showed up in the Head-On (apply directly to the forehead) PS2 extras.
I've never been able to nail down why there wasn't a TMB2 or similar since the first one sold like a million copies or whatever back when that was a great amount.
War of the Monsters certainly seems like it's using tech/models/etc. that could have been from a sequel. Jaffe was already working on
God of War by then, I don't know if they didn't want to do it without him or what.