Warning: Contains SPOILERS for The Mandalorian season 2, episode 8, "Chapter 16: The Rescue."
Grogu, aka Baby Yoda, goes off with Luke Skywalker in The Mandalorian season 2 finale, "Chapter 16: The Rescue," so what does that mean for his future in The Mandalorian season 3 and beyond? As the episode title (and previous installment) reveal, The Mandalorian season 2, episode 8 is centered around the attempt to rescue Grogu from the clutches of Moff Gideon and his Imperial Remnant. With Bo-Katan Kryze and Koska Reeves joining the fray alongside Mando, Fennec Shand, and Cara Dune (with Boba Fett providing a drop-off service), the mission is ultimately a success, albeit not one with its challenges. But the greatest twist is that Baby Yoda does not end up being reunited with Din Djarin for long.
Faced with the seemingly insurmountable threat of the Dark Troopers, hope is briefly lost and then sparked into life again by the arrival of an X-wing on Gideon's light cruiser. The savior of the day is none other than Luke Skywalker who, with his green lightsaber and the Force, makes quick work of the Dark Troopers. Eventually meeting Grogu, the implication is that Luke sensed him in the Force on Tython, and has been searching for him since, coming to his rescue when he was most in need.
Much to Mando's (and audience's) devastation, Grogu decides to go with Luke, so that he can be trained in the ways of the Force, learning to harness his incredible gifts so that he will never be in such danger again. Baby Yoda and Luke depart, but does that mean there'll be no Grogu in The Mandalorian season 3? It seems unlikely, even despite the separation. While Mando and Baby Yoda have parted for now, it would be a huge shift in the show's storytelling to never have them meet again given how The Mandalorian has so far been about the due more than anything else, even if only one of them is in the series' title. Beyond that, and the marketing/merchandise boon of having Baby Yoda in the flagship Disney+ show, there is clearly setup here for more of Grogu's story to be told, and unless Disney is planning on yet another Star Wars spinoff show (which admittedly cannot be ruled out), then The Mandalorian season 3 is the most natural place to do that.
It's unclear just how long Grogu will spend training with Luke, and whether or not he ends up being part of the Jedi Academy that is slaughtered by Kylo Ren. Based on the timeline, though - The Mandalorian season 2 takes place around 9ABY, so is still several years off Luke beginning to train Ben Solo - then there's a good chance that (mercifully) won't happen. Ben was said to be Luke's first student, and while they could retcon it, it doesn't seem like there's much cause to. Going down that route would mean that Baby Yoda, arguably the biggest character of the Disney era, would either end up being brutally killed in an event that largely happened offscreen, or he somehow escaped another Jedi Purge, but again in a way that seems hard to find a good way to tell in a movie or show. Given the hype of introducing Luke, then there is an obvious demand for more, and again, it's something The Mandalorian season 3 could show, with him training Grogu in the Force for most of the season (though they wouldn't need to appear in each one), before perhaps realizing his path is with the Mandalorians, not the Jedi.
There is enough story to sustain Din Djarin's arc in his absence, especially now that he has the Darksaber. Presumably, much of The Mandalorian season 3 will be given over to that plot line, featuring more of Bo-Katan and seeing Din learn more of the Mandalorians' history and culture beyond his limited view as a Child of the Watch. Because of that, it is somewhat more arguable that Mando's journey could survive without Baby Yoda, but it wouldn't be a wholly satisfying one. Grogu is still a Child, after all, and Mando is effectively his father. Grogu did want to go with Luke, but he's shown hints of reluctance to be trained previously. His experiences on Tython may be what changed that, and it could even be he has envisaged what's to come and knows he has to go with Luke, but he's been given deep ties to Mandalorians that can't be for nought, and could instead set him up to rejoin Din and be a Mandalorian Jedi. As Mando says, "I'll see you again. I promise." It's hard to see that word being broken.