Every country has separate immigration lines for citizens and foreigners. Immigration officials have access to national databases but not those of other countries. Like the USA and most other countries Japan has biometric data associated with passports, but only has direct access to match that for Japanese passports. Perhaps you have never experienced the “dystopian” foreigner entry process in the USA or your own country.
Don Quijote has no such signs and does not demand your passport to enter or shop. If you want to get the VAT refunded — a privilege many countries extend to foreign tourists — you can do that by showing you have a tourist visa. Essentially duty-free shopping extended out of the airport. The USA does not have a national VAT so no American store needs a passport to refund taxes.
Japanese businesses do sometimes exclude foreigners, mainly because they don’t have multilingual staff, but also because they want to reserve some places for Japanese and not have tourists overrun every locals restaurant and bar.
Customs and immigration officials everywhere ask probing questions to catch smugglers and criminals. Annoying perhaps but hardly a Japanese thing. Part of the job description. You have no right to enter a foreign country, the immigration officers get to determine that.