We don't know the exact circumstances behind Masato Kato's departure. I suspect it may have been a combination of
a) having enough experience and pedigree (Chrono series, FFXI) to strike it out on his own. Within the industry, freelance scenario work is a new concept, and he's among the first to try it
b) getting an interesting offer from outside the company (a former colleague)
c) realizing that Square would probably have no new projects for him (due to the continuation of FFXI and the fact that other teams have their own preferred writers already) in the forseeable future. It seems that Children of Mana, which is being produced under a newly assembled team, has turned out to be his first opportunity.
At any rate, I don't think there was ever any deep resentment between him and Square, despite whatever misgivings he may have had (starting from the problems on Chrono Trigger to the post-Chrono Cross resource chaos created by Sakaguchi's FF movie) during his tenure.
It's important to note that Kato worked as a FFXI planning director and scenarist up until the project's completion. He then became a freelancer after getting the Baten Kaitos offer. However, Kato also continued to represent Square (along with some of the upper producers) at those FFXI award ceremonies, so their working relationship was at least amicable.
