So I'm skeptical as always about the Geno/Square rumor, but honestly it's not really that far fetched that they'd be worried about him being seen more as a "Smash" character than anything else, for one reason. Precedent.
This wouldn't be the first time a situation like this happened with a Square Enix character in a platform fighter.
Lara Croft was in talks to be added to PlayStation All-Stars Battle Royale, but the 2013 Tomb Raider reboot was in the works. Square held off on giving Superbot the rights because they wanted her reboot design in, but wanted it to debut in her own game as opposed to a crossover outside of their control. In other words, they wanted it seen as their new Tomb Raider Reboot design, not a PSASBR design. Then, of course, DLC was given no budget and Lara never got in anyway, but still.
That's why I'm not immediately throwing out the idea...Square Enix has done things like this before.