The Grogu choosing Din should have been part of S3, where we explore Din accepting his place in Mando culture after having explored the different ways they live, but he remains unbalanced because he realizes he is not a Mandalorian but instead Grogu's Protector.
Mirrored by Grogu's arc of realizing the same about the Jedi, it may be where they were raised but not where they were born. Neither got to pick being a Mandalorian or a Jedi, but they both get to pick to be together.
Instead, it’s like 1.5 episodes in an unrelated show, which means come S3, Din doesn’t really have anything to do aside from "Mantle Mandalore," but the writers were never going to give that to him.
If we built up in S3 the idea of Din taking everything he learned in past seasons into him learning to choose for himself—which way and how he wants to live—his handing off of the Darksaber and proposal to Bo would hit larger because we know it’s coming from a guy who lived his life following what other people tell him to do, but he is now committing to picking his own way to live.
Plus, it’s much less interesting in stories if the status quo is maintained at the end of an arc, because Din has learned and grew; he can never be the same again, and he doesn’t actually feel any different aside from how he feels like a side piece to Bo Katan's story.
But the season wasn’t framed as Bo Katan's story of learning that to rule Mandalore, she must also experience the arc Din did in S2, but where she also needs to learn from the mistakes that led to the fractures and infighting of the past, and that as a leader, she will not win every fight for her people, but she should never give up on them, even if they do her.
Plus, the ending seemed to imply that his story is supposed to have been about him learning to pick his own lifestyle, and the reason his helmet was on at the end is because Pedro didn’t wanna come on set.
His leaving with Luke isn’t meant to be something Grogu actually wanted but what he thought he needed because that’s what he’s been told. Din thought that as well because it’s also what he’s been told.
They both generally lacked any semblance of real agency and just did as they were told. In S3, Din pledging his service to Bo and handing her the Darksaber was Din actually choosing to do something because he wanted to, not because he was told by someone.
The issue is S3 did nothing to expand on any idea with either of them and also failed to introduce Bo Katan as the new main character effectively; she doesn’t really play a role at all until episode 3 or something.