When fans first learned that Mushu wouldn’t make an appearance in the live-action Mulan, they weren’t happy. However, the film’s director, Niki Caro, told USA Today that while she acknowledges the role Mushu played in the original film, the new adaptation required some big narrative changes:
Article source: https://www.cinemablend.com/news/2554106/mulan-director-explains-mushus-absence-from-the-disney-movie