Luigi is fine. He still has a really good projectile for neutral and frame data/hitboxes overall. His jab is quick, has high mixup potential, and has a pretty damn good hitbox. His grab can still lead to huge combos, consistently 30ish on most of the cast and some bigger like 50ish combos on fast fallers. Luigi's damage output in general is actually pretty crazy, even on some his safest moves; you're taking like 10-14 damage for one hit and then any follow-ups after that will add up pretty fast. The frame data allows Luigi to perform multiple aerials in a short hop and w/ the cyclone mixup as well he has good abilities to mix it up in neutral. His foxtrot and perfect pivot are really good which makes movement pretty effective despite rather slow overall mobility. Cyclone spike is a crazy edgeguard. Luigi is fine for killing with a Mario usmash, bthrow, super strong bair, and some more gimmicky or ocassional kill options like dsmash, fsmash, and up b. Life is better with the Sheik nerfs; Rosa and Cloud are somewhat hard but he's a lot better vs Bayo than he ever was against Sheik. Also does generally well against characters like Diddy, Fox, Mario, Sonic, and Pikachu. I feel like Luigi is clearly a step behind the actual top tiers, but the line isn't big and he's an upper echelon high tier (though likely not the best one). My view is that Luigi has top tier traits with certain aspects that make some matchups hard.
Most of the Bayonetta hate has to do with the fact that she carries players, far more than Sheik did pre-patch. It's beyond the extent where all characters carry players to at least some extent and top tiers obviously bring results, more that Bayonetta can legitimately invalidate skill barriers because her kill combos are indiscriminate.