Let's talk about Banjo and Sephiroth
Not from a game design perspective per say, but a roster and marketing perspective.
Banjo was clearly chosen as a "gift to the fans", he's not a big name seller like Master Chief or Marcus Fenix, he really only appeals to people grew up on N64 and the few 360 kids who stumbled across his game on the Xbox Marketplace, but the smaller, more hardcore Smash fandom is filled with that prior demographic and thus was all about Banjo at the time - you could consider that a bit of a selfless gesture really, but as Ultimate's DLC cycle went on it started to feel like a bit more of a selfless...
jester for reasons I'll go into soon
Sephiroth, on the other hand, was clearly meant to draw people
to Smash, or encourage people who hadn't played since Steve's release to come back for a week or two - nobody really discussed Sephiroth in Smash circles and most hardcore fans were still finding Cloud's inclusion hard to grasp. This, in combination with Banjo, would be fine, good even, on it's own if it weren't for... you know who.
The Square Enix rep of choice in the Smash fandom has always been Geno - a side character from Super Mario RPG, a late SNES game released even after the N64's debut - with his longstanding popularity likely owing to a lot of people
not knowing he's owned by Square. Perhaps he does lie a little more niche than Banjo because of that first factor, but the Banjo-to-Geno popularity gap is nowhere near as big as the Master Chief-to-Banjo popularity gap so even though I hate this thing's presumably-hand-shaped guts and the hype around him, it's easy to understand why people would expect Geno to follow Banjo and not a second Final Fantasy rep - despite Sephiroth being objectively more marketable and worthy of a "celebration of gaming history" like Sakurai claimed Smash to be like in Byleth's presentation. Geno getting a Mii costume and Spirit is another contradictory factor because that means he was still prioritised in negotiations over the likes of Tomb Raider, Chrono Trigger, Bubble Bobble, and... oh yeah...
the indisputable most culturally significant video game ever made.
And this kinda gets me to my point, the reason Smash speculation can be so toxic is because the game itself isn't giving consistency or a clear direction for roster picks, but also tries to pretend it does have one with the whole "celebration of history" thing, which is a problem when you're dealing with a fandom that relies on patterns - not to stereotype or generalise (nor to accuse Nintendo of ableism), but a lot of the diehard fandom is autistic teenagers, people who tend to need routine and consistency - and that lack of consistency, maybe "heavy compromise" would be a more neutral term, applies to almost every aspect of the series as a whole, from Schrödinger's wavedash; to online mode forcing you to play others' rulesets; to old movesets being kept while new movesets take a
worse different direction; to the whole "tighten the gap between casual and competitive" BS - ultimately when you try to please everyone, you please nobody. Call it a "celebration of gaming history" and the impact of Halo is invalidated by nostalgic gushing for four-games-and-a-plane-racer Banjo-Kazooie, call it a "celebration of fandom" and the fans' collective love for Geno is usurped by the money they can get from Sephiroth.
Also, don't even get me started on how Everyone is Here falls into this.