Yes, that would have been the old Jedi, Luke never gave up on, or chose between his friends/family and following the Jedi way. That's what made him different, he kept both, and in doing so, following his own instinct and path, keeping both he found the path to keep his friends and save his father.
No way he'd now give Grogu that ultimatum, to chose only between one or the other. (Unless we see a later scene where Luke is still willing to train Grogu), otherwise this is a betrayal of Luke's character, of everything he learned and was.
I'm thinking Favreau wanted to move on from Grogu, and only return to him at the end. And the higher-ups and toy reps insisted he bring Grogu back ASAP! So he pulled the admittedly clever Lone Wolf & Cub ultimatum, yet without thinking much on how it reflected on Luke.
To send him off in the Uber-X-wing was also ridiculous, especially after Luke announcing "I'll guard him with my life"
This is Favreau burned out and just phoning any $#!T in to get it done.