Let's face it: no 3d party character is here for cross-promotional reasons.
Banjo is actually in a similar position to Mega Man and Simon: a series that was once very succesful and heavily associated with Nintendo, that just hasn't been big in the last 10 years or so.
It's true that, unlike Banjo-Kazooie, Mega Man and Castlevania still got some games, but both series are now far from the industry leaders they once were.
Another thing that's common between all 3 series is how they all received spiritual sequels purely thanks to fan demand: Mighty no. 9, Bloodstained and Yooka-Laylee. The actual main characters, meanwhile, all get in Smash.
And a good chunk of the others is here for legacy reasons, too. Pac-man didn't get added because of Ghostly Adventures, he got added because of the original Pac-man and the World games, the actual classic beloved ones. Cloud got in instead of Noctis, because Final Fantasy VII is the actual classic beloved game. Snake is not promoting anything since his series is deader than Banjo's, Sonic is still around because of the iconic status he earned during the 90's, certainly not because of his last games. Even Persona 5 you could say is kind of a modern classic.
Banjo fits perfectly fine next to all these characters, the criterias are the same.
If Sakurai went for purely promotional picks and for sheer recognizability and nothing else, we wouldn't have had any of the guests we currently have, bar probably Bayonetta. We'd have something like the Angry Birds or the Call of Duty guy, instead.
Smash has always been about promoting quality gaming. Or at least, the kind of gaming that's most close to how Nintendo conceives it.