I don't think they would mind a crossover setting. Like the reason the creator wasn't a fan of Pyramid Head in the later games and the movie was because without James, Pyramid Head loses alot of purpose and symbolism. He's practically in the later games and the movie because he's frickin' popular and has an very memorable design, but without any of the stuff that made him meaningful and important.
In a crossover setting, the stuff doesn't really matter since it's all for style points, so I don't think the creator would mind if Pyramid Head appeared in Smash, even without James. It's in the main Silent Hill content(like the main series and the movies) where it's a big deal because outside of Silent Hill 2, he's just there for style points whereas in Silent Hill 2, he was a much needed wheel to Silent Hill 2's story and to it's main character James. So much of Silent Hill 2 and James' character and development is shown in a very different light if you take away Pyramid Head's importance to James and simply make it a mere entity.
That said, I don't think the original creator can input anything since I don't think he's part of Konami anymore. But I don't think he would mind Pyramid Head in Smash Bros. since the symbolism and purpose is not needed there.