There's still a lot of conversations to be had on this even if they don't extend. For example what can they use in the 3rd? Can they still mention Stark tech? If not, what about the suit? Does it have to go? What about E.D.I.T.H. or any other A.I. for that matter? How does he repair his image if they can't mention Mysterio's backstory at Stark Industries? Can they use the jointly developed characters like Michelle and Ned?
It's going to be tough to resolve given where the filmmakers left Pete at the end of FFH.
Option #2 is always start over with a soft reboot of a new Spider-man in Venom's world.
It's actually not as challenging as alot of comic fans seem to think it is. If anything, Feige constructed the ending of SMFFH in such a way that they could have a less MCU heavy connected Spiderman film for three:
1) Stark is dead , so unless they were gonna have yet another film of Peter in the shadow of Ironman, there's really no need to mention him.
2) There was no means a promise that May would end up dating Happy long term, and if anything ,she seemed
less into the idea of a serious relationship so there isn't a need to have him around either or mention him.
3) As far as all the stark tech goes, it would make sense that Peter would
now have to cut ties with Stark industries , and have to now make his own suit, and stand on his own two feet, just at the point when the world is against him. That's very much in keeping with Peter Parker's bad luck.
4) They can still mention Mysterio without going into his backstory. I doubt his backstory would have been as important to a third film even with Marvel anyway given that the focus is will be on the villain ,or villains,of part 3, not the backstory of Mysterio from SMFFH.
5) Ned is a given, and they could probably use MJ/Michelle as well. If anything they could finally just declare that MJ is indeed Mary Jane, which the average filmgoer assumes anyway. Zendaya is not going anywhere. She's too popular outside of Spiderman for Sony to give up for the sake of Disney.
6) A soft reboot really isn't needed because its basically just comic fans who are hung up on the continuity between Holland's Spiderman and Hardy's Venom. Venom, fair or not, was popular among the GA , and the GA really won't question the two of them being together and the continuity with Homecoming and Far From Home.
7) You also have to factor into all of this
when the next film takes place, i.e. how far in the future. Will its be TLJ style and begin a minute after the end of SMFFH , or will it be months later , will the film begin with the i.d. reveal then jump several months into the future.
The issue really is whether Sony can execute it right and whether fans can really except that Spiderman is no longer part of the MCU . The GA will go along with it assuming its good.
