The thing about spirits is when Geno's and Mallow's spirits were negotiated for versus when the DLC was decided. Ultimate's project plan was finalized in 2015, so any time in those years leading up to January 2018 (give or take a little while before, given third party negotiations), Geno and Mallow were negotiated for spirits with Square Enix. If they were negotiated really early on, Geno's still got a chance, as DLC negotiations and that for spirits are totally different and at different times. I'd wager this is a pretty good possibility, given Cloud probably had to be negotiated very early on, especially if they wanted to get 'everyone is here' going with the project plan. I could see them going for Geno and Mallow as spirits while they were at it.
Now, I'd say that, if Geno's and Mallow's spirits was added in far later, it'd be pretty clear to me. They weren't late additions like, say, Shantae and Risky Boots, though. It makes me wonder if Geno's spirit even matters in terms of this DLC. If by some miracle, we get more DLC, too, his spirit will certainly have no bearing on things.
"But if they negotiated for Geno's and Mallow's spirits, they could have just removed them if Geno was going to be playable."
To that, I say: nay. When negotiations are made for a character to be used in a certain way, it's set in stone. After going through the hoops to do that, it'd just be a loss of money and time if they rescinded that. If they were first party, removal would be easy, but it isn't such since they're both third party. Even if Geno is planned for DLC, it doesn't mean that his spirit can't exist in the base. It's all a matter of the timing and the logistics behind it. His spirit could mean everything or it could mean nothing at all. Unless we got everything behind the scenes regarding his and Mallow's spirits, though... we don't know.