Miguel departed the valley for Mexico at the end of Cobra Kai season 4, and season 5 would do well to hold off his return home until the end. In the tournament-focused Cobra Kai season 4, the stakes were at their highest in the Valley dojo battle. Despite their differences, Johnny Lawrence (William Zabka) and Daniel LaRusso (Ralph Macchio) enter a rocky alliance to prepare their students to face Cobra Kai for the All-Valley Tournament.
Though Johnny and Daniel eventually got past their old rivalry, Cobra Kai came out on top with Tory (Peyton List) defeating Sam (Courtney Henggeler) in the final match. This left Johnny and Daniel forced to close down Miyagi-Do and Eagle Fang Karate, with Cobra Kai becoming the Valley's dominant dojo. Season 4's ending left everyone shaken, including Johnny's student Miguel (Xolo Mariduena).
At the end of season 4, Miguel heads to Mexico to locate his estranged father. Johnny promises Miguel's family that he'll bring him home, but this needn't be a swift return to the status quo. A big contributor to Miguel's sudden departure after the tournament was Johnny himself. Despite Miguel's season 2 injury causing a brief back sprain in the tournament, Johnny continued to push Miguel to win. Far from simply encouraging his student to push through the pain for something he wants, Johnny was driven to defeat his old sensei John Kreese (Martin Kove). With Miguel having grown so close to Johnny over the course of Cobra Kai, this understandably left him a little disillusioned. From Miguel's perspective, he was no longer a karate student competing in a martial arts tournament, but a weapon in his sensei's proxy war with his own mentor. While this didn't necessarily leave Miguel angry at the still somewhat immature Johnny, he needed some time to remove himself from the situation. As a result, a prolonged absence is now necessary for Miguel's overall narrative.
By going to Mexico to reconnect with his father, Miguel is showing that he's in need of guidance that he was no longer getting from Johnny. That said, Miguel's decision was also made on impulse due to his reaction to Johnny's overzealousness at the tournament. Miguel is in need of some soul searching, and that's nothing that he can or should rush. Johnny also realizes his mistake at the end of season 4 of becoming so singularly committed to defeating Kreese as to lose sight of everything else. Going into season 5, Johnny needs to redeem himself for his mistake in over-burdening Miguel with Cobra Kai's defeat. The best way to handle that would be to hold off Miguel's return to the Valley for as long as possible.
Obviously, Miguel will come back into the fold in Cobra Kai season 5's story. Tory's discovery that Terry Silver (Thomas Ian Griffith) bribed the tournament's judges will surely feed into her and Robby (Tanner Buchanan) coming to question Cobra Kai's tenets. Furthermore, with Daniel teaming up with Chozen (Yuji Okumoto) to take down Cobra Kai, the dojo war is far from over. Miguel is sure to be a part of it, but he has his own internal journey to embark on, too. Cobra Kai season 5 needs to allow him to do this, making Miguel's return to the Valley being withheld until the end of the season a wise decision to implement.