Do character reveals generally bring more people into Smash though? I'd imagine a few *might* bring some people in, but I don't see people going "oh they added my waifu, I'm totally gonna play this game now!". Hell I generally only see that kind of behavior from furries whenever they add anthropomorphic animal characters into a game (like I've literally seen with people saying they're gonna try XCOM 2 purely for the supposed "snake waifus" they're adding?), and that's usually just because they thirsty. At this point, if someone has a Switch and *still* don't have Smash, and money isn't the reason, they're never getting Smash.
But ARMS is still an existing franchise, so assuming they want to push ARMS, that still goes hand in hand with #1 if they're making an ARMS 2, or #2 regarding ARMS 1 if not.
Waluigi would be straight up fanservice, unless they're actually making a Wah game. He's Banjo-Kazooie, plain and simple, as would Geno (though Geno can also low-key advertise for NSO if SMRPG gets on it, and the upcoming Paper Mario by reminding people SMRPG was the spiritual predecessor to Paper Mario). RFA also getting in now would be super duper weird, considering the spirit event and also, just why. As base, sure, fine but as paid DLC? That'd be a worse pick than Byleth.
Literally all of the DLC (except Plant who was a bonus to begin with anyway) fit at least one of the criteria though. DLC 1-3 were all popular and requested (Hero also to promote DQ11). Terry was to an extent. Byleth was to shill, obviously. DLC 6 is a bit of pushing ARMS again + to answer "where ARMS?" that some people were asking. Hell let's go back to Sm4sh: Ryu was a bit of an ad but Street Fighter also has a long-standing history that was definitely in part thanks to the SNES. Bayo was picked from the poll (popularity). Cloud I don't even need to mention. Corrin was obvious shill. The only times DLC (specifically DLC, not base game which is absolutely anything goes) hasn't been any of that criteria is when the character was a bonus (Plant) or a returning veteran (Roy/Lucas/Mewtwo). I also do realize that this is a fanrule, but why else would DLC characters be chosen if not out of fan demand or to promote something? Crazy example, but take any unrecognizable, unlikeable, character from a dead game. No one knows this character exists, no one asked for this character, and the series isn't making a comeback. Why would they be added in?
Also FTR: I'm not saying King Boo doesn't fit criteria. He would promote LM3/the DLC, and while not nearly as popular as other picks, he does seem to have some people rooting for him. The only thing I'm trying to point out right now is that the DLC has been "making sense" when you think about it. Terry is arguably the closest to "doesn't make sense", but even then, he still has his fans. All the DLC so far has either been asked for, promotes something, or both.
PS: I never said we weren't getting first parties, but I did find it weird they dropped 4 third-party then Byleth.