Instead, series creator Yuji Horii has provided a brief update which seems to indicate the project is still on track. Here's what he had to say (via Gematsu):
"There has been some worry about Dragon Quest XII, but I was actually in a meeting [about it] until just a bit ago."
Unfortunately, he still "can't share any details yet", but one thing he did mention is how he wants it to be "something worthy of the posthumous work of the two [Akira Toriyama and Koichi Sugiyama] who passed away".
Toriyama (the Dragon Ball creator who passed away earlier this year) worked on the Dragon Quest titles as an artist, and the game's composer Sugiyama passed away in 2021.
Dragon Quest XII: The Flames of Fate was originally announced in May 2021 and was at the time described as being a much "darker" and adult-themed take on the long-running JRPG series.
No platforms have been announced for The Flames of Fate yet, but at the pace its development seems to be going, Nintendo's successor to the Switch could be available by the time it's released.
This update about the new Dragon Quest title follows on from the news Dragon Quest III HD-2D Remake will be coming to Switch and multiple other platforms.