I never finished Shenmue II due to a power outage.
BUT, in my fan fiction novel, "Shenmue: A Story of Collectable Toys and Nightmares", the epic ends when the Covenant travel through time to take the magic mirror pieces from Lan Di. Master Chief, who also conveniently fell through the time rift, pairs up with Ryo Hazuki to take down an army of aliens and Chinese kung-fu masters. Then they team up with Lan Di and all three fight the Covenant Master, Dekshard. Dekshard is about to kill Ryo with a laser when Lan Di jumps in front of him, taking it to the gut instead. With his dying breath, he finds redemption. Master Chief tags Dekshard with a plasma grenade and hides behind some crates. The mirror is destroyed. Master Chief repairs the time rift and transports Ryo back to the time before his father is murdered so they can live happily ever after.