I'm hard playing Devil's Advocate again here. Sorry, thread. But.... this is as good a time as any to point out that there are still a lot of gaps in Smash's library. Geno is certainly one of them, but recall that FF was only repped with 1 fighter, 2 songs, and 2 spirits. Sephiroth in one sense is a way to appease a mass audience, but he also patches some of those gaps as he'll bring more music (2 more tracks, yay), some Mii costumes, some spirits, and another stage. Granted, it's all FF7, but it's something.
Considering this, Geno would cover what? One 2 decade old game that has 2 spirits in the game already? I feel like an ***hat saying this because Geno is my absolutely most-wanted character at this point, but really think about what he would bring to Smash as a platform. Some more spirits, some more music, some more costumes, another stage and fighter..... but it would all be focused on the Mario series, which is already heavily repped, and specifically one game that has a legacy but it's barely recognized by its own developers.
Now pretend you're Nintendo and Sakurai. You want to build Smash out to become this platform that doesn't just celebrate Nintendo history but gaming history. You want as many friendly allies to work with you and license you their content so you can beef this thing up. Now step back and think about all the huge pieces of gaming history (the icons, if you will) that are still missing from Smash. Smash still has no mention or inclusion of anything Taito made (Space Invaders is a huge gap imo), a lot of the classic NES-era franchises that still get dragged out for revivals and collections once in a while (Ghosts 'n Goblins, Ninja Gaiden, SMT, Adventure Island, Wonder Boy, Contra...), or all of those 3rd party mascot characters from the '90s that were very popular (Crash, Bonk...). Then you have IPs that are in the game, 1st or 3rd party, but just feel undercooked, deserving of more content, or hardly repped at all (Bomberman, Mystical Ninja, Resident Evil, Rhythm Heaven, Undertale, Shantae, Sonic, Xenoblade...). And then there are the "controversial" IPs that are either so far removed from Nintendo, so niche or such recent zoomer picks that people tend to very strongly hate or love them but they will all generated guaranteed buzz (Devil May Cry, Danganronpa, Granblue, TWEWY, Halo, Fortnite, FNAF!!). Also, Kingdom Hearts exists, which doesn't really fit into any of those categories but would please a TON of people. Oh, and then there's stuff like Fire Emblem or Pokemon Sword and Shield not being shilled hard enough. Because, you know, wtf not?
I guess what I'm getting to is that, from Nintendo's standpoint (and Sakurai's), there is really no room for Geno at the table. As far as they're concerned, he's actually already sitting down. There are bigger fish to fry and more content to wrestle into their grasp. They dealt with Geno a long time ago and now it's time to add more IPs to their gaming history collection called Smash Bros.