I'm no expert on this subject, but as someone who was a writer for a Sega fansite (and avid participant in the Sega and broader gaming community) through the 90's and early 00's, I think we can generally put to rest the idea that Virtua Fighter 3 existed on the Saturn in any form that would be markedly different (as XL2 has pointed out) than what we saw released as Fighter's Megamix.
I think Occam's razor would lend us to believe at this point that while VF3 was long *rumored* to have been in some form of development for the Saturn, the complete and *total* lack of evidence (almost three decades since) for *any* type of build--experimental, prototype, etc.--means that it is almost certainly a fabrication of games journalism, Sega fanboy optimism, and potentially Sega PR overselling what their AM divisions could achieve in order to not undermine the still relatively new Saturn hardware.
We must consider also the availability of information on contemporary projects like Shenmue for the Saturn, and it just doesn't seem likely to me that Sega, Yu Suzuki, or any of the dozens of other AM2 employees who would have to have remained silent actually *have* any information to spill.
I think Occam's razor would lend us to believe at this point that while VF3 was long *rumored* to have been in some form of development for the Saturn, the complete and *total* lack of evidence (almost three decades since) for *any* type of build--experimental, prototype, etc.--means that it is almost certainly a fabrication of games journalism, Sega fanboy optimism, and potentially Sega PR overselling what their AM divisions could achieve in order to not undermine the still relatively new Saturn hardware.
We must consider also the availability of information on contemporary projects like Shenmue for the Saturn, and it just doesn't seem likely to me that Sega, Yu Suzuki, or any of the dozens of other AM2 employees who would have to have remained silent actually *have* any information to spill.