>I’m curious for feedback here from other designers. My instinct at this moment is to cut diagonal movement.
You're never going to make a game that instinctively "clicks" with 100% of players. I recommend resisting the impulse to fix what isn't broken to reach a broader audience. Besides, you spelled out a much better solution already: Simply rework the tutorial so that moving diagonally is unavoidable and have players repeat it once or twice so it sinks in.