I've looked at the previous rulings, including night watchers, ranged attacks, targeting ninja attachments (blowdarts)... But this is never covered.
Takaharu doesn't say Takaharu's controller may choose the target.
Takaharu Reaction: When another player's Battle action would target a Ninja at Takaharu’s battlefield: It targets a different Ninja you control at that battlefield, if legal.
"redirect" isn't a rule anymore in the CE rules that I can find (which used to specify the user chooses the new target).
I found: http://rules.l5r.com/CE_Glossary_T#Targeting
A "change to targeting" is anything that changes the target. Choosing a target is different from, and comes before, the actual targeting. Specifically, if an effect interferes with an action so that another player chooses one of the action’s final targets, the player who originally would have chosen the targeting is still the one who targets the final target.
This does not define when exactly the action WOULD be chosen by a new player, simply suggesting that it can.
I also found: http://rules.l5r.com/CE_Effects#Substitution
In effects that substitute targeting, if the new target has to be a "legal" target, then failure to find a new legal target means the original targeting happens normally
But again, nothing suggests that the player who forces the original player to substitute targeting gets to choose a new target.
So, that being said, does that mean Takaharu's reaction says basically "you can't target that card, pick another" but the original action's player still gets to choose which of the remaining legal targets to target (if any exist). All my ninja playing friends (and it sounds this way from most discussions about him) seem to think he magically gets to choose the new target, even though I can find no CE rules that say he does.
----- I want a judge ruling on this so I don't feel like D-bag for wanting to correct them (especially when one of the friends is getting back into L5R and I don't want to discourage his new attempt at a goju deck by being mean. I didn't say anything to him because I want him to love the personality and otherwise his deck isn't competitive, but our more active scorpion player is very competitive and so I want to know the correct ruling to be fair.)