So I may have come to a realization. Sephiroth is a curveball in speculation because not many people were expecting him, and he broke some established rules, like Villain DLC and 2nd Unique Rep for 3rd party
However I think Sephiroth may have done something bigger. He may also have hurt the Assist Trophy argument. and as for how...
Base game was not made with DLC in Mind
Lots of Smash Bros. tidbits from Sakurai - DLC talk, Goku unlikely, not thinking about another ballot, more - Nintendo Everything
DLC was only approved of sometime after January of 2018, which by that time the Base game was far into development. While there may have been discussions on potential DLC, the Base game was not made with DLC in Mind, meaning the base game was made in mind that the base game was gonna be it. This includes the Negotiations for the 3rd party characters and roles, which brings us the the next point
It took 2 DLC Passes for Sephiroth to be in Smash
a Legendary character like Sephiroth had to wait not only past the base game, but FP1 in order to be DLC. There is an argument that Sephiroth, along with Steve may have always been planned to be added as DLC even if a Full FP2 was not a thing. even with that being the case, it's still a fact that Sephiroth and Steve both missed the base game, and if DLC was not a thing at all, then both of them would have just have to wait until the Next Smash game
What does this have to do with Assist Trophies
This does not apply to all Assist Trophies, as I do think Assist Trophies have different circumstances from each other. this especially includes the Veteran Assist Trophies
Not every Veteran Assist returns, as we could see with Tingle, Saki, and Magnus being absent from Assist role as an example. One thing you noticed is that the Assists kept, along with some of the new Assists tended to be really popular or important characters in their own right. This was also a big reason why Isaac returned as an Assist after Missing Smash 4
So when taking into account how the Base game roster could have been the final roster we'd get in general, the Absence of certain popular Assists from their role would just be weird. This is especially true for 3rd party Assists, since they have negotiations tied to them
What separates a veteran party Assist and someone like Sephiroth, is that Sephiroth has never made an appearance in Smash up until he became playable, so his absence up until then was not something to take note of, meanwhile with any Veteran Assist Trophy, their absence would be a weird omission. In the case of 3rd parties, the Veteran Assist Trophy would have to be negotiated very early on, so if DLC is decided later, they already did negotiate for the character in Assist Role back during Base game
And with New 3rd party Assists, they still would have to be negotiated early on when DLC is not a factor into Development, so if they want to showcase these characters in a more prominent role, Assist is the way to go.
Why weren't the Assists Promoted in the base roster
Like said above, Sephiroth had to wait until FP2 to become playable. Not every character can be made playable at a specific point of time. Some characters have to wait, despite having all the reasons to be made playable
This is especially true for 3rd parties since there is more that goes into making them Playable characters, has the 3rd party needs to be involved in the process of how the character is made
Bomberman
Bomberman is not playable, but he showcases how they Assists can have upgrade in role. Bomberman was likely negotiated around the time the base game was being decided, and the negotiation for His Assist and Mii Costume were likely different
What happens if there wasn't any DLC
There's a reason I mention Only Sephiroth and not Steve. Unlike Steve who's attached to a new franchise in Minecraft, Sephiroth comes from the same Universe as Cloud in FF7. If Sephiroth had to wait till next game because there wasn't gonna be any DLC, They likely would have just added him as Spirit or something like that, along with potentially some of the other content like the other FF7 Spirits, or some of the music
Is this Shadow related?
Yes it is Shadow Related. Shadow is one of 3 Veteran Assist Trophies, the others being Ghosts and Gray Fox. However Shadow is the main focus because of the merits he has to join Smash
In the case of his Assist Trophy, Seeing how constricted the base roster was, and how even Sephiroth couldn't be made into a Playable character in the Base roster, it's likely that Shadow couldn't make it in also. However unlike Sephiroth, Shadow has been an Assist in all 3 games Assists have existed in, and even if Shadow was being thought of as DLC, they Couldn't just remove his Assist. not only would it be a weird Omission since Shadow is a Popular and Important character and has no reason to be removed as an Assist, but they likely already negotiated his Assist role before base game development started and before DLC was a factor
The only way Shadow could have been made playable in base roster is through an Echo Fighter...however while Shadow theoretically works as an Echo, like in the case of Isabelle who was a popular Echo Suggestion, Shadow has his own merits for his own Fighter, and there's a very good chance that a Echo Shadow was turned down not only because Shadow has all the reasons to have substantial development time put into him, but Also Because Sega likely wouldn't work with the Echo idea, since there be alot of sacrifice on Shadow's individuality to be made an Echo
Put it like this. Shadow has comparable merits to Sephiroth, who was added as playable in FP2.