After Hattori runs and locks himself inside a house, I do not get an option to knock on the locked door.

You can reach him via the roof. Once inside there is no option to talk to him, but you can knock on the door which teleports you outside the house initiating the cutscene.

Whilst there's a work around, it's a bug nonetheless.

Strange, didnt encounter that on 1.04, but I did arrive 1 hour too early at the harbour to meet him. Talking to him made him walk away without comment so I meditated an hour and then it worked. :)

Seems there are a few little hickups left in the quest. :)

Similar errors occur a lot (at least they did in my playthrough). Usual solution - revert back to previous checkpoint and replay part. In case it didn't work, revert to earlier checkpoint and try to replay intermediate part of mission In case it all fails, load earlier save and try to replay mission from start.
In one of missions I had to reload 17 times (and I do hate Dandelion's narration) just to have interaction prompt appear, in another mission I had to ignore guides and rush through enemies to make script works.