This is absolutely baffling to me, given, as you noted, generation, transport, and fueling issues.

Stevie Wonder would have no problem seeing the problem with hydrogen, and yet Toyota still can't see it?

I'm guessing Nissan, GM, and Tesla have fairly robust patent portfolios related to recent EV tech.

Toyota probably has some stuff to offer related to the electrical side of the hybrid drive, but it's probably a far weaker portfolio-- some of their stuff is near the end of the patent lifecycle, and some is only useful in the context of range extended or hybrid-electric designs.

That means they can't offer a compelling cross-license agreement. It might cost them hundreds or thousands of dollars per vehicle to license the patents at "market rates", particularly of other players see it as a way to hobble a huge competitor.

OTOH, if they can make hydrogen work, they probably hold a lot more cards to deal with other manufacturers.

I'm surprised there wasn't more two-pronged thinking though. The selling point of hydrogen fuel-cell was that it was less subject to range anxiety, but we knew there are clearly identifiable markets where that message was a non-starter. No point selling a 500km range to a city dweller whose longest journey is 25km, but you could sell them a vehicle with Ni-MH batteries left over from 1990s laptops and it would cover their needs.

This would have allowed them to focus on the markets where liquid/gaseous fuel would make its last stands. I'd think freight would be the big one-- even if there's a charging station every 100km along the interstate, business wants to minimize fueling stops, so being able to say "800km+ range-- a full shift of driving on one tank of hydrogen" would set the bar high for electric competition.