I think the profs. know that you can choice 3 universities but just end up with only one, and they can understand this situation. But you should wait until having the final result of your assigned university from embassy (around next January). Don't say anything now because currently nothing is 100% sure.
In my case I'm waiting for the official announcement in order to mail the other professor telling him the news, but since said professor approached you first maybe you could tell him that you still haven't gotten any official announcements from your Embassy, but that if that's really the case you are sad to hear that and that you are grateful to him (but phrase it better xD)
This is the first time I've heard about this. So, basically you second choice's professor told you that you didn't make it to their university? It means second choice university also got notified by MEXT, right? Did the professor mention the reason why you didn't get accepted in that university?
I don't know what to do if I were in your position, because we haven't received any official results from the embassy yet. If we did, at least we could say to the professor that it was MEXT who decided what university we got placed in (without saying about priorities) so it's all MEXT's decision. An awardee said to me that the professor will understand if we say that.
It's normal to feel that way if we asked for more than one LOA. This is why my lecturers back then said that I should reject the other professor in the beginning and only requested for one LOA, one of the reasons is to avoid this kind of uncomfortable situation. But I didn't listen to them and now I don't know what to say to my second choice professor if MEXT places me in my first choice university.
A little update to my situation:
To clarify, the 2nd choice university got a list of the people who MEXT is sending them, and I wasn't on the list. So the 2nd choice didn't get notified at all per say, but rather they can indirectly determine who didn't make it to their school.
In the end, I decided to withdraw from the 2nd school, since it's clear I am not receiving the MEXT Scholarship with them. (I was accepted into the graduate school earlier, independently of the MEXT process.) I sent an email to the 2nd prof, explaining that unofficially MEXT didn't select me for this school, but I might be selected for another, thanking him for his time and help too.
Thank you all so much for your thoughtful advice: Alyssa, Sayu, and Fanfan. I thought long and hard about what you've said (maybe a little longer than I should have). In the end, I felt that the prof was sure I wasn't coming to them and they were just waiting for me to confirm this; I didn't want to keep them hanging on any longer. Moreover, I felt a black cloud of guilt hanging over my head, and now that I've replied, I feel some sort of relief.
So now I'm down to just one university, which I will very likely get accepted into, but still not officially. I hope I haven't shot myself in the foot here. Hahaha :emoji_sweat_smile: