I’ll fully admit, with Shin Megami Tensei there is a problem with the Law-Neutral-Chaos axis with regards to story and what you are doing within it, and the problem I speak of mostly relates to the general crapsackiness of the universe of these games (anyone who’s played the main games knows full well what I mean).
If you side with Law, you bring to the world dictatorship founded on intolerance, blind obedience, and genocide. If you side with Chaos, you destroy all social order trying to bring freedom but it soon degenerates into a state of lawlessness where no crime is punished and you have to prove your might every day or die. If you go Neutral, you stop Law and Chaos from having their way with humanity, but you don’t create any long-lasting peace or freedom and just delay the inevitable: Law and Chaos are just gonna fight each other again, and humanity will be caught in the middle again.
There’s nothing wrong with believing in the central tenets of any of the alignments so long as they suit you personally, but in the games you’re generally a tool for whoever represents Law and Chaos. In the case of Law, you take orders from “God”, the angels, and/or the Messians. For Chaos, you take orders from Lucifer or the Gaians. In Neutral, actually it tends to vary with Neutral. In the first and second games you actually are going your own way by following the Neutral path, and some characters like Masakado or Taijorkun just help you along the way. But in SMTIV you’re doing what Stephen wants, and in Strange Journey you’re continuing the mission you were sent to do for humanity (but your comrades pat you on the back for it). There’s nothing wrong with believing Law or Chaos tenets, but the problem is that you’re basically just imposing your will on mankind by joining a side, or no you’re not you’re just helping somebody else impose their will on mankind.
By contrast, in Raidou Kuzunoha versus King Abaddon, the alignments are about Raidou’s actions reflecting who he is as a person, which is determined by your own actions/choices in the game, therefore you can be Lawful or Chaotic without needed to join the sides of Law or Chaos and help them impose their will on mankind. The only problem is this system was low-key in that game. I don’t know how you can implement that system on a grander scale without it basically just being the same alignment system as before other than you get a different ending after beating the final boss and that ending might affect the individual more than the world, but then that might deviate to far from the core of the main series.
Saying that, it might be a moot point anyway. The whole point of the games is that you’re supposed to decided between ultimately imperfect choices per your values system, and, as Kazuma Kaneko himself once said, “everyone carries his or her own criteria for victory”.