There is more continuity between Art of Fighting and King of Fighters than there is between the original Doom series (1, 2, 64), Doom 3, and the new Doom series (2016, Eternal)
I guess any of that would be relevant if I mentioned SamSho and Fatal Fury but I didn't. Art of Fighting and King of Fighters are the same thing. They haven't made an Art of Fighting game since 1996, and all the important characters from AoF are mainstays in KoF now.
But again, if you're truly deadset on these being entirely different series (they aren't) why would they make Terry's reveal trailer a play on a King of Fighters intro, use AoF and SamSho characters in it, and then suffix it with "Smash Bros x Fatal Fury"?
No, they're not the same thing.
Art of Fighting, just like Fatal Fury or Samurai Shodown, are their own series. This is basic information.
King of Fighters is basically the Smash Bros. of SNK. You have characters from Fatal Fury, Art of Fighting, Psycho Soldier or Ikari Warriors frequently appearing in KoF games, plus of course completely original characters that belong to KoF.
Also, KoF games occur in their own timeline. This is easy to prove because for example, Geese Howard, who is canonically dead in the Fatal Fury series, is alive in KoF games. You can play against Geese using Rock Howard, his son, in KoF XIV, something that completely clashes with Fatal Fury's timeline.
Yeah, they aren't making more Art of Fighting games, that's true... but that and the series being the same as KoF are just 2 completely different things. That's a leap in logic that I don't understand, honestly. Not trying to sound rude, but this feels super random.
I mean, if for you AoE is the same thing as KoF, I must assume you think the same for F-Zero, Earthbound or Ice Climbers, and consider these series and Smash Bros. games the same thing.
As for Terry's trailer, I honestly don't know what's your point with that. It's incredibly obvious Terry is a special case that brings content for SNK in general beyond his own franchise, but he's technically a Fatal Fury rep because he's from that series. The trailer is an homage to SNK properties, and I guess that it was also a hint that we would get content beyond Fatal Fury.
In other words. Characters such as Terry or Ryo are King of Fighters characters? Yes, that's true, because they appear in KoF games. Are they
original KoF characters? Obviously not. Is Captain Falcon a Smash Bros. character? Yes. Is he a original Smash Bros character? No, because he's from F-Zero.