I was starting to formulate this when I read ur Cyno2SQ thoughts but you ended up touching on similar points anyways, so this is mostly reiterating but the writing of the Desert vs Rainforest "conflict" in Sumeru feels slightly taunting/patronizing.
It is so obviously an ethnic issue and yet centrism rhetoric is abound about how the oppressed are to blame for "prejudice" against the privileged,
& just like in Jeht WQs, Tanit WQs Order of Skeptics WQs, the AQs and multiple SQs, cutscene lore bombs are added to provide in-universe justification to blame Desert dwellers for their own languishing right after lecturing them for blaming the other side of the (apartheid)Wall of Samiel.

The most patronizing part is how blatantly the "barbaric savage tribe v erudite civilized metropole" Desert v Rainforest writing follows Orientalist Tropes 101, almost to a T, but hardly anyone points out how blatant this all is.

But anyways, one part I semi-agree-disagree with you is the resolution. Like you said, the narrative & Cyno himself provides flimsy(if not nonexistent) justification for why he should keep the power of Hermanubis, whereas to Sethos it is the last remnant of his entire culture, heritage, upbringing and faith.
Sethos is much more compelling for a protagonized depiction, whereas Cyno (as the top enforcing agent of the Akademiya that enforces the apartheid-like divisions of their 2-nation-states) simply seems to use "might is right" justification for his position. It feels so colonial.

Ofc, it would be remiss to not point out that the nature of the gacha holds this back. Cyno's kit already has Hermanubis imagery, so at the very least they won't canonically take it away (even tho they could still do it IMO)
As such, since Sethos has not been gacha-banner'ed yet, his writing is allowed to be fluid & not set in stone throughout this quest, making him more dynamic.

But my main gripe with the ending resolution to have Cyno takeover as head of a people & culture he knows nothing about and shows little interest in, is that Cyno could've been made to actually feel like a protagonist and challenge his worldview if he actually let the power be returned to its indigenous caretakers, regardless of the result of the duel.
It is simply just not compelling at all to just "powerup" the trivia-fact-tier spirit that powers Cyno's kit when we just got an entire plotline & character faction who are shown to actually care for the spirit that Cyno just uses for gameplay.
It all feels like a continuation of the colonial paternalism that plagues all of the Deshret desert nation writing.

And that's not even going into how the problem of genuinelycompletely unrelated filler dialogue in the quest.
All the fan grumbling of "NPC quests" regarding NPCs that are important to the themes of the story went out the window now that playables were brought in to do genuine actual line count inflation for no actual narrative reason. It was hard to sit thru just for the actually compelling part (Sethos+the ToS) being only give like 15 minutes.