There'd still be the problem of this Yamato having a relationship with a human, which is something that was not done, as far as I can tell from the games. Pretty logical, since demons are considered to be demons, not just some kind of 'other class or race' of people. Besides, it would make all the allusions to Nero being so much like Sparda, him having Sparda's colors (blue and red) and a purple aura sometimes, pointless. Aside from that, there's no mention of any relatives of Sparda, be it this Yamato guy or anyone else. It's very improbable, at least.
Bah *sigh* i really wish capcom had done a proper backstory