People who complain that Sonic's character is "static" must have never played Unleashed or Black Knight. Or they did, but they didn't understand them.
I think one of the reasons why Unleashed and Black Knight are such fan favorites and stick in our memory so well is because the entire theme of both games is about taking Sonic out of his element, taking away things that he has relied on for so long- speed, jumping, spindashing, boosting, homing attacks- taking all those things away from him, and seeing how he does.
And he still shines. Even without all the abilities that he has relied on throughout his entire life, he still manages to beat the Big Bad.
(Please note that I haven't finished either game yet and I'm just drawing from what I've been spoiled on.)
As the werehog, Sonic is not able to curl into a ball at all (we're ignoring the mobile games for this post), and his greater height and weight, probably due to a larger bone structure, as well as heavier, thicker fur, keeps him from being able to run as fast or jump as high as he's used to. He now how to resort to fighting styles he has never used before, including several forms of martial arts (aided by his Dark Gaia-powered stretch abilities). Perhaps the most unusual of all is how he has to get down on all fours to run.
In addition, Sonic describes his werehog form as "pretty ugly." Sonic thinks of himself as good-looking, and this is a part of his personal identity, which is part of why he was upset that Amy didn't recognize him (no matter what feelings he may or may not have for her). The werehog form also seems to be physically uncomfortable and taxing on Sonic's body due to the heavier weight, as the werehog idle animations include Sonic stretching in an exaggerated way and forcibly rotating his shoulders (motions I, myself, have learned to use after years at a desk job that has ruined my neck and upper back). Sonic's idle animations also include him being jumpy and looking around every few seconds- basically, the werehog never fully relaxes.
All in all, Sonic is very uncomfortable as a werehog, and prefers not to be seen in this form. But the reason why is not fully evident until he thanks Chip for protecting him and keeping him from turning evil. To this, Chip replies, "I haven't done anything, Sonic. You're too strong to lose yourself."
On top of this, Amy doesn't have a problem with Sonic's appearance. She still loves him. Tails also doesn't care what Sonic looks like. Neither does Professor Pickle. Neither does ANYONE. Even if they're startled by the werehog's appearance at first, they all seem to go, "Oh, it's just Sonic. This is just what he's like at night."
The entire story of Unleashed was about Sonic coming to realize that he is not who he is because of what he looks like or how he is built.
Black Knight takes this a step further. In Unleashed, Sonic wasn't able to run, but he was still able to use his body as a weapon. In Black Knight, Sonic can run again, but nowhere near as fast as his normal speed. All of Sonic's abilities to fight with his body are stripped from him, and he is forced to use an actual weapon, instead. And Sonic hates this. He even says it: "I wish I didn't have to use this dang sword!"
Sonic has never used a weapon before in the games (as far as I am aware, anyway). His weapon has always been his own body: his feet, his fists, his whole body via spindash and homing attack. Now he's having to train himself to fight with something outside of his own body. This requires not only the creation of new muscle memory, but also a complete shift in the way his brain processes information to fight. He always has the option to just crumble and say, "I can't do this, it's not what I'm used to, I give up." He never does that. He complains a bit at first, but eventually rises to the occasion and excels at swordfighting.
Please bear in mind that I haven't ever gotten past the King Arthur battle. I presume Sonic is forced to kill him, and then I believe there's another half a game after that. But so far, it seems that Sonic's character arc in Black Knight is about him learning that he is not who he is just because of what he can do.
What makes Sonic Sonic is not what he looks like or what he is able to do, but about who he is inside. Sonic is someone who cares, someone who is strong, someone who doesn't give up, someone who sees a difficult situation and, no matter how much of an inconvenience it may be, turns it around and finds a way through.