While I think that The Way of Water is a decent film, I think it's fine to discuss some of its flaws. Now, as I understand it, Avatar 2, 3, and a part of 4 were filmed all at once, and James Cameron stated that the box office performance of 2 will determine if 4 and 5 will be released, or if the story concludes with 3. Perhaps this might explain why so many plot lines and characters remain unresolved, although in my mind, the film is still too thin on some of the characterizations compared to the original Avatar.
The film didn't quite strike the same emotional chord for me as the original, and as many have pointed out here, Neteyam's character was simply too underdeveloped for his death to really have an impact. I'm frankly also not sure how I feel about Neytiri's character seemingly shift to be more "aggressive" and "compulsive", as now it seems like the character lost some of her associated "wisdom" from the original film. The recoms also felt almost like a non-threat, as they were dispatched far too easily almost like cannon fodder. Again this circles back to how this movie seems to dispense with the portrayal of RDA's frugal approach to resources in the original. The stakes definitely didn't feel as grave this time around.
One part of the film that I really didn't like, however, was the sequence where they were trying to revive Kiri from her apparent coma or seizure. Norm and Max, the "avatars" of science in both the original film as well as this one, were simply dismissed as useless while some kind of "spiritual" process brought her back. At a time when we're currently facing dangerous waves of anti-science and anti-medicine sentiments (just see the virulent anti-vaccine movement, some of it sponsored by Russia to deliberately harm other countries' populace) in the real world, I was quite dismayed by this seeming push towards pseudoscience. I understand that Pandora has the fantastical element of Eywa, and the original film had its plot points that were dependent on that, but it wasn't spiteful towards scientific medicine like this scene was. To me it's a poor choice.
Also, when it comes to set designs, I noticed that in terms of weapons, they seemed to have abandoned the more futuristic designs from the original Avatar and settled on essentially a futuristic M4-type rifle with an LPVO and offset red dot, which is the primary weapon for both Jake and Quaritch. Granted, the ergonomics and manual of arms of the M4/AR-15 has stood the test of time with most modern militaries moving to that pattern, but it was definitely a bit odd seeing something so "contemporary" show up on Pandora; it instantly made me think of my issued weapon.
I'll also note about audience reactions from my experience. The reactions from my viewing are for the most part muted, a few chuckles here and there. Keep in mind that the theater also had my squad of Marines, who can be pretty rowdy, but most of them are junior PFCs and lance corporals, so they might not have been inclined to be too disruptive when officers (me) and SNCOs were around. Their opinions were quite variable, but the consensus definitely seems to be that the middle part of the film had too much filler, while the action sequences at the end were great. They did get a laugh at Lo'ak's cheesy military lingo.
I did notice a few plot holes though, such as the end when the Metkayina clan disappeared during the war ship part