I disagree with this. One of the fundamental points of P4's story is accepting oneself and working through one's personal issues and social issues to get to that point, but that is in no means reflected through character development across the entirety of the game. It happens in milestones, directly linked to how they were before they confront their Shadows and after that moment.
Yukiko is initially withdrawn and standoffish, but she doesn't slowly start to become more spirited and outgoing. Literally during the first hours into the game after you save her, she then shows who she truly is with the laughing fit and from then on she doesn't become any different. It's not a slow progression; it's a very abrupt and distinct transition. And, as some are saying on this page, that wasn't really the point with P4's cast. A side-effect from the cast intentionally being designed to be close friends from the get-go means that there was extremely little actual internal conflict between the characters, which meant that they had to remain pretty much static among themselves to convey their bond of friendship (which is another fundamental point of P4, far more than it was in P3).
Aside from the fact that I disagree that only select moments in P3's character arcs are notable (I found that pretty much every single member of SEES progresses in a very noticeable way with changes throughout the entire story, except for Koromaru and maybe Fuuka), there's the fact that there isn't such a black-and-white transition as "pre-Shadow personality" and "post-Shadow personality" as there is in P4. Even with Akihiko; there is gradual development in how the characters behave and interact with each other throughout the whole experience.
This isn't only a P3 vs P4 thing, either. P2:IS and P2:EP characters have character arcs in a similar vein. P4 is the only mainline title in the series where the main characters do not have that, next to Persona 1. Again, it was likely an intentional design, but it's also part of what makes them my least favorite group (far ahead of P1's, though) in the series.
To be clear, the first part of my post was in response to the "P4 characters don't have arcs" part of Ekai's post. That said...
"Slowly change" was a poor choice of words on my part, but at the same time, I don't think Yukiko immediately stops changing after her shadow confrontation. She starts laughing in front of people who aren't Chie, but she's still avoidant towards people she's not familiar to with. You can see this in action when Yosuke asks her for her number, and when she withdraws inward when she talks to Mitsuo. You can't even social link with her until the opportunity presents itself. Her demeanor after she immediately joins is still that of a fairly mild individual, which is different from when she
delivers a brutal smackdown to Adachi near the end of the game.
And I definitely disagree with the notion that the P4 characters are immediately close friends. Everything I said about Yukiko applies to Kanji. Even after his shadow confrontation, he's still prickly (he straight up tells Rise to "shut up" after she tries to be friendly with him), but he softens up considerably towards the latter half of Persona 4. Teddie doesn't fully begin to integrate with the group until he
he becomes human.
Still, i'll concede that these aren't things that happen gradually, but eventually. I recognize that the P4 characters are mostly the same after their shadow confrontations. My main argument is that the characters didn't need to change significantly after their shadow confrontation, and they weren't worse off because of it. P4 as a whole operates in a completely different manner from P2-3, since the characters are mostly living ordinary lives. Ordinary high school characters don't fundamentally change as people over a year. The reason the P2-3 cast change dramatically is due to large volume of life altering events that they have to experience in a short period of time.
Comparatively, the P1 & P4 characters mostly stay the same because outside of their run in with the supernatural, their own lives aren't changed significantly.
EDIT: What Setsu posted definitely applies.