^ I feel we're starting to discuss semantics here.
I'm willing to concede whatever, I do believe after all these years lines are blurred and anyone's guess is perfectly fine and I have no problem in being corrected.
But my point was that Final Fantasy VII took several false starts, which it did, and went through a relatively lengthy phase before development launching all out, remember these scripts and initial ideas could have happened before Chrono Trigger launched, at some point that initial Final Fantasy was shelved due to it.
Afterwards it was obvious it wouldn't be on the SNES, but PSone didn't happen immediatelly, Square was still on track with the N64 until shortly before Super Mario RPG launched. That's 1996.
There's no doubt in my mind that the branching that happened was in line with the original lines of experimenting square had in mind, otherwise they could have just went with the same look for all their games. If I reckon correctly some old articles suggested they tried the "3D backgrounds + 2D characters" with early FF7, and I reckon I've even seen FF7 beta screenshots featuring pre-rendered sprites:
There was a lot of testing, and it was only normal that Xenogears either ran with a scrapped idea, like Parasite Eve and Final Fantasy VIII did, or it was a fallback effort. Not to turn it into FFVII (unless massive retooling took place) but perhaps as a engine/structure one. That was never needed because for all we know FFVII launched way sooner than it did and thus must not have hit major roadblocks.