Dummied Out: Farfinkle, one of the viral Chao, cannot be unlocked in the Japanese version of the game. This involves a Game-Breaking Bug with it's special ability to inflict a random status effect.
Echidna versions of all the Blue Ridge Zone Sidequest characters, notably Timothy and his Father, less hilariously actually a child named Timmy, along with dialogue to match that fact.
A robot Echidna with an arm cannon (Think Mega Man)
Unused art for items (And possibly the items themselves)
Exiled from Continuity: Shade and the Nocturnus clan are unlikely to show up in any of the games or comics again after the lawsuit by Ken Penders.
Flip-Flop of God: Kevin Eva, who was the community manager of Sega Europe in the mid-2000s, stated that Sonic Chronicles is non-canon to the main games. However Aaron Webber, who is a social media coordinator at Sega of America stated that "everything is canon".
Stillborn Franchise: The game was not well received enough to get work on a sequel going at a Sonic-level speed, and when Penders rose up in 2010 it put the kibosh on the plans for the RPG series.
Vapor Ware: The sequel, thanks to two main factors:
Screwed by the Lawyers: More famously we have the case against EA and Ken Penders, who went after them after being pointed out that the Dark Brotherhood were Expies of his Dark Legion from Archie Comics' Sonic the Hedgehog. Which started off his rampaging litigation into taking control back of virtually every character he created for the series.
Less famously, Bioware seems to have completely shut down any and all handheld development that isn't part of their Jade Empire series (which also seems to be Vapor Ware after four years of no updates).