Here is the other thing that gets me about Miyagi. I dont think I am out of line in suggesting he appears to be grooming Laruso. No one else finds it strange that he doesn't train anyone else? He only takes a shine to Daniel.
Now my other take on Miyagi is more conspiratorial. If he wasn't grooming Daniel for some sick twisted fetish, perhaps he saw him as a way to launder money. Again, this is a tin foil hat look, but explain to me how Daniel can move from poverty to extreme wealth by getting into the automobile dealership industry? That seems like a stretch. Where does he secure his capital from? Miyagi. I dont think the movie's and Cobra Kai's writers were trying to tell a story of upward mobility....I think the underlying unspoken is pure mob and criminal family behavior.
Call me cynical, but I think if you look hard enough you will see it too.