Yeah, yeah, most movies are full of plot holes, because they’re supposed to be entertaining, and therefore different from everyday life. But you’d think that someone, somewhere would be in charge of making film franchises internally consistent from one movie to the next. That apparently isn’t always so. The character of Mr. Myagi changed considerably in the two short years between The Karate Kid and The Karate Kid Part II.
The first Karate Kid strongly implies that Miyagi was born to Japanese parents in America. We’re told he attended UCLA, was forced into an internment camp during World War II, and then fought in the 442nd Division — a unit almost entirely made out of Japanese-American soldiers. Miyagi in particular crane-kicked so many Nazis that he was awarded a Medal of Honor.
In the second film, however, the entire plot revolves around a completely different backstory: It turns out Miyagi is actually a native-born Japanese man who was forced to leave when he let his boner do the talking instead of his fists. He had upset his hometown by proposing marriage to an already-betrothed girl, and had to flee to America.
There are several reasons the two stories don’t jive at all, which you can read about at Cracked, along with plot holes introduced in later movies from the Star Wars, the Matrix, and other movie series.