Did he get retcon'd? I just don't buy him pussying out because of what some crazy authority figure did.

He got ragcon'd

In the first film's ending, it's clearly shown he murdered his doctor and jovially danced about it signifying that he's now the Joker and not Arthur Fleck (the entire reveal in the third act is about the fact that there is no Arthur Fleck because he was adopted and he has no real name or identity) and that allows him to become the Joker which harkens back to the fact that the Joker has no set name or origin. There is actually NO Arthur but only Joker. The sequel was a 200 million spiteful twitter post by a rich Jew idiot who just couldn't resist ruining his biggest achievement just to spite a subset of internet users who had already moved on from meming this character since it's not 2019 anymore. He was making a 5 year belated response to what people had done in 2019.

Embarrassing failure in every imagineable way.