They probably didn't realize just how demanded Waluigi was for Smash when planning FP2, or didn't care, seeing as how these characters (or the games they're from) are ones Nintendo/Sakurai initially had ideas for before SSBU was revealed. They clearly didn't care when three other ATs got promoted before him.
I mean you could kind of apply this argument to any Assist that hasn't been made playable yet, including Isaac
And to be honest, I heavily doubt they didn't know Waluigi was in such demand, considering Reggie said he's talk to Sakurai about it. even then, Waluigi has always had some sort of demand pre-Smash Ultimate as well.
More likely because Kazuya was the protagonist of the first Tekken game.
I call bull on this being the main reason
Tekken 1 is a pioneer game, but the Most Popular games in the series (not including Tekken 7) are Tekken 3 (Especially Tekken 3) and Tekken 5, in which Jin was the protagonist. So I'd think Jin would have Kazuya beat in that Regard, especially since Kazuya was nowhere in Tekken 3
If we got a Tekken character in 2000's era, Jin would probably be the pick from that angle
Kazuya recently has been in the limelight more, thanks to Tekken 6 and Especially Tekken 7, where he gets his first W since Tekken 1.
I think the main reason though Kazuya might have gotten in was because he had the best moveset in Representing Tekken
-Heihachi doesn't have any Devil Gene in him, so he doesn't represent an important aspect of the Tekken Lore and Franchise
-Jin does have a Devil Form, but Current Jin and Devil Jin are way too different from each other, in that it would require 2 different movesets to represent both. You could go with Tekken 3 Jin since he uses the Mishima Style in that game, but that would go against Jin's character since he has a reason for not using the Mishima Style.
Kazuya represents the Mishima Fighting style, and his Devil Form is tied to just his Base moveset, instead of being a whole different moveset altogether, so it's easier to implement him