Consider this: The world’s turned upside down. Celes washes up on the shore of the Solitary Island. In Cid’s care, he and Celes forge a strange grandfather/granddaughter relationship just to hold on to their humanity. But Cid is slowly dying probably due to starvation. You can save him by feeding him good fish, impacting the story by signally there may be hope yet. But if he dies, Celes reaches the climax in her arc. Celes even tries to end her life due to the hopelessness of the situation.
There’s more of a gut-wrenching factor to lets the players know the severity of the situation. And this in keeping with the story, it shows how one can overcome all struggles for the sake of hope. Either situation is acceptable, but the latter includes both the themes of hope and hopelessness with more impact.
Does canonicity depend on the player?
Other situations are less debatable. We all know Cloud never made it into SOLDIER and instead became a mere Shinra infantryman. As a character, the way he thinks informs how he acts. Remember the Junon parade in which you have to impress Rufus Shinra? It’s hard to do really well on the first try for a reason. Cloud’s not a SOLDIER. Like you, he has no idea what he is doing. Sure, you get 5000 gil if you just happen to perform the drill correctly. But your failure is a nod to Cloud’s time in SOLDIER.
And what about side quests? It’s fun for the player, but does it make sense for your characters to play them in the story? Are they aware they’d win a specific item? Much less than the item will help them fight the ultimate evil?
Think about Final Fantasy X. Why are we catching butterflies, racing Chocobos and playing blitzball? If to get the ultimate weapon, how canonical is it for each of them to have their ultimate weapon?
Why is Squall looking for the Queen of Cards, when he one of the most no-nonsense characters in the series? He super dedicated to the mission at hand. Why is he playing cards in a time like…Time Compression?
And even though Zidane is a fun loving guy, I’m pretty sure he’d want to stop Kuja. Should we play side quest before the ultimate sense of urgency?
Of course, Final Fantasy doesn’t micromanage every aspect of your gameplay. You can play the game how you see fit, at least within the linear structure. However, if you want to play the story in mind, sometimes it’s best to consider how the characters would act.
Even then, it’s up to you!