Yeah but then again he did go into the details of the Fire Emblem franchise like nobody knew what it was anymore.
Granted, maybe it was for the sake of filling time or just talking origins, but if you know Smash, odds are you know Fire Emblem.
He's also a pretty big fan of FE, so his presentations likely would have a few bias factors in it.
I don't know if VII is his favorite FF game though. Also, he's a huge SNK fan.
That said, my thoughts on the Geno costume; I never originally bought into the theory that it was a Enix and Square side, but it might not be so illogical. Besides them actually wanting to push Dragon Quest harder, Sephiroth already would've been licensed/figured out by then. If Geno's costume would come back, it'd make more sense to bring it back with Sephiroth at that point, so they can bring it and the Chocobo Hat together. That, and don't forget SMRPG actually took a lot of notes from Final Fantasy, being essentially a Mario Fantasy game in terms of how it's designed and a boss based upon it. This is yet another reason to keep them together. Considering we have noticed Square/Enix/Square-Enix be picky on what gets shown off together, this isn't that unfounded.
Though I do want to point out the returning costumes were also updated(not as Premium, just made graphically better). Geno's costume being re-used would require new licensing either way(since it was licensed for 4), but they have every reason to outright update it graphically. It doesn't even need to be premium for that. Though, imo, if it's sticking with a costume this game, I'd definitely rather have a good face and music along with it. At least then it doesn't look weird and we still get some great music. It's the next best thing, again, imo, to playable.
Quick caveat; I am blatantly speaking for myself. I don't expect nor am suggesting people should be happy with a costume, even a much better version than 4's. I'm just one who doesn't dislike costumes and am okay with that kind of representation. I was quite happy with K. Rool having a playable variation alone. Tails, Knuckles, etc. ...Though where the hell is the Shadow Hat(which due to how he is, he doesn't need to be tied to any specific moveset, since he uses guns, swords, and fisticuffs. Incidentally, so do Rabbids, though I did want them to have a full costume with unique weapons like the plunger. Assuming they couldn't be regular playable).
Now, if Geno's costume doesn't show up, and Sephiroth isn't complicated, I could see a bonus character being plausible. Not a Pass 3, though. Only Steve and Min Min of Pass 2 took a while, and that was due to them being complicated. Now imagine if no other character is like that, but is like Sephiroth. If they have time, a bonus character or two is possible.