It definitely is being slept on, though. Not because people particularly hate Sword & Shield, but it got a spirit event, two Pokemon tournaments, recent voice acting theory that also makes it unlikely a character requiring a lot of voice acting making it in, and the fact that we are close to gen 9 at this point than from the start of gen 8.
We had very few instances where they skipped a spirit event, and once of them was Fire Emblem: Three Houses that ended up getting a character in.
I don't understand why they would have release a spirit event for Sword & Shield if they intended on adding a character eventually. And I'm certain most people think the same to an extent.
So I was saving this for another theory I was making, but to play Devil's Advocate, I have a proposition for the appearance of the Spirit Event
So the Sword and Shield event came very close to the actual release to the game, like around a Week after the game came out. the reason there wasn't a Spirit Event on the day the game came out was because that week was Tourney week, and that week was the Sword and Shield Tourney event
If you compare this to other Nintendo I.P's that got spirit events, they got their spirit events like months after the game came out. Paper Mario, Astral Chain, Ring Fit, Bowser's Fury, and Age of Calamity are examples
One thing you notice though is that with 3rd party I.Ps like Trials of Mana, Bravely Default 2, Monster Hunter Rise, and Daemon X Machina (Kinda), their Spirit events come out within a week of the game's reveals, same deal as with Pokemon
Remember that Nintendo actually doesn't 100% own Pokemon. they share the rights with Gamefreak and Creatures.Inc in a 33% split. This means that Nintendo will have to compromise with the demands of the other 2 entities
So an Argument I could see is that even in the case a Pokemon Fighter was in the cards, Gamefreak and/or Creatures.Inc wanted to immediately promote the game to make sure that as many people know the Pokemon game is out, including Smash players. That would be part of the reason we got the Spirit Event and the Tourney event near when the game came out. Even I noticed that the Pokemon Spirit Event seemed to be more promotion based than usual in nature, and that was part of why part of me is hesitant in calling Pokemon deconfirmed from the Spirit event
List of Event Tourneys - SmashWiki, the Super Smash Bros. wiki (ssbwiki.com)
List of Spirit Board events - SmashWiki, the Super Smash Bros. wiki (ssbwiki.com)
While Fire Emblem 3 Houses had 3rd party help, Nintendo 100% owns the I.P to Fire Emblem, unlike Pokemon, so they are free to promote it in their own way
Now there still may be some holes. in Particular, the Team Rocket Mii Costume might have been better placed with Terry's Pack since that was closer to the actual release to the game. However being in Banjo's Pack might have been safer in the case development on Terry went longer than expected
I talk about this more in another theory I have planned