I read the discussion the topic from a week ago on thinking vs not thinking during matches and "analysis paralysis", and I'd like to share some of my own thoughts on the subject:
I think a big issue many players face when trying to figure out how much they're supposed to "think" during games is that they're not properly differentiating between information about any given situation that can (and should) be internalized during practice, and information which is not available prior to the start of the game and which needs to be consciously observed; specifically, your opponent's decision making. The former category includes anything which is objectively true regardless of the opponent's skill level; if a Fox nair approach at a certain distance can be DD grabbed then that's going to hold true whether the player behind the wheels is Leffen or your 0 - 2-at-locals Fox beginner. If a Falcon is too far away to reach you with whatever move you're afraid of (presumably knee) before you have time to react, then you don't need to worry about being hit by that move even if the Falcon in question is someone you've never faced before; whatever new, unique mixups they bring to the table aren't going to change anything about a "solved" interaction.
The examples above are fairly straightforward and probably not news to most people. However, there are two very important things to note.
The first one is the concept itself: any situation or position in the game has a variety of facts and implications attached to it about which moves are being threatened, which approaches can be reacted to and which ones must be predicted, etc. You should not have to actively think about any of these pieces of information during a tournament game; they're supposed to be internalized, part of your second nature.
The second, and perhaps the more important one in the context of this discussion, is the fact that this concept applies to an absolutely massive amount of situations in this game, including ones which many mid-and-below level players may erroneously believe to be part of the other catgeory, the opponent-specific kind of information which requires a more case-by-base approach. I believe a big reason for this is that many situations in neutral are complex and/or nuanced to the point where the player doesn't even consider the possibility that, rather than choosing between sticking to their default game plan or opting for a potentially ill-advised committment, there may be a concrete, objectively sounder way to respond, as long as you've familiarized yourself with the situation to the point where the decision is instantaneous, yet completely informed.
Now, it's difficult - if not outright impossible - to completely internalize all the relevant knowledge about complex, borderline abstract neutral interactions without actively thinking about the situation at some point beforehand. This is where friendly sessions come into the picture, and where the notion of Play to Learn > Play to Win is as relevant as ever. Accept the temporary drop in performance and focus on learning how to truly understand the more abstract concepts beyond the bare minimum required to play a passable neutral. Figure out the ins and outs of important positions you run into frequently, and make that information your own. Internalize it. And if friendlies alone don't seem to be enough or if it seems like an overwhelming task at first (sure as hell did for me), then look at videos of high level gameplay and see what they do, to get a starting point to work with. Don't just copy them mindlessly, because that's how you end up wondering why all of your nairs in neutral get whiff punished while all of M2K's connect cleanly and lead to 0-death combos. Take your time and analyze the specifics carefully.
I think all of the above is very important to understand before one can move on to figuring out when and how to apply conscious observations of one's opponent's general habits, move preferences, knee-jerk decisions, etc. to their gameplay. This is not only because of what I already mentioned about it being somewhat difficult at first to see the difference between those things and the ambiguous, yet objective information mentioned above, but also because making correct observations about your opponent's movement pattern isn't going to do you any good regardless if you're not confident about what exactly you're supposed to be doing in response. It's easy enough when it's just about DD grabbing a predictable nair approach from Fox, because that's a very basic interaction which Marth players figure out before they learn how to walk, but in many other scenarios it's not going to be as obvious at first glance. You need to experiment and grind that stuff in friendly sessions, so that when the situation arises in tournament, it's something you've seen a thousand times before and know the exact answer to, meaning you can simply leave the rest to your muscle memory. You know they're going to jump but is your dash attack going to be there in time if you do it right away? You don't have time to figure that out mid-match. Do it in advance.
I recommend anyone who has not yet done so to read The Inner Game of Tennis, and I recommend anyone who's already read it to read it again, because the mental framework which Timothy Gallwey puts forth - the interaction between Self 1 and Self 2 - is in my opinion the key to understanding this aspect of the game. To sum up the idea, the goal is to acquire a state of mind in which Self 1 (the brain) makes an observation and then (almost simultaneously) makes a decision about what to do, which then leads to an immediate, seamless transition to Self 2 (the body), who executes the decision flawlessly. In essence, you observe a situation, decide on the follow-up, and then you let the autopilot take over. The less interference, the better. Self 1 can only be a distraction while you're already in the middle of executing something, and Self 2 isn't conscious enough to make proper adjustments to whatever your opponent is doing. Assign each of them with the respective task at which they're an expert.
In short:
Internalize, internalize, internalize
Then observe and analyze
(but do it quickly this game is FAST)
I'd also like to point out that, although it was a struggle for me to approach these ideas initially, the satisfaction I got when I finally felt I had started to actually outplay my opponents in terms of decision making - as opposed to just out-executing and out-punishing them - was way beyond anything I'd gotten from Melee before that point. What I'm trying to say here is that it's worth learning, because it made a game that was already my favourite game of all time somehow become 10x better.
also sup Kevin you're still my favourite Marth (and Falco). Also think it's cool that you still hang around here and answer questions so thoroughly on a regular basis.