Well...I sort of see what you mean, as he doesn't quite match anything either company has done before. If I try to picture him in Mario sports titles, or in a Square Enix RPG, it just doesn't seem right. Even Mallow sort of avoids this, seeing as how he's basically just a living version of your typical Mario cloud (like Lakitu rides.)
But honestly, I don't have a problem with it. That is Geno. He may not fit either company's styles exactly, but he is the perfect representation of the two combined. He is a Nintendo and Square character. He exists only when the two merge. He is both lighthearted and innocent, and dark and serious. He is distinctly Mario RPG, and perfectly embodies the theme of the game, the FEEL of it, and the essence of those two companies at the time the game was made. I'm not even sure a character that feels like he does could exist now at all. I keep trying to envision a new Mario RPG, a modern one, but somehow it doesn't seem to work. I'm not sure the feeling CAN be captured again.
And so that's Geno. He's sort of like that feeling. Something that can never be recreated. And honestly, I'm not positive he'll fit anywhere but Smash. But I'd be fine with that, or to be proven wrong and see him in modern Mario games, or perhaps Mario and Luigi. They MIGHT be able to pull it off with Paper Mario, but I don't know. Personally, I just want him in Smash, where he belongs.