So, PushDustIn has been tweeting stuff from a recent interview with Sakurai, and it seems this is a part of it all:
https://twitter.com/PushDustIn/status/1098437904588623872
When it comes to Smash, Sakurai would add as many characters as he could if he had the time and money. Note that earlier, he was going on about how they had a surplus of that this time around, which does spell some good news for Geno's future. Along with that, PushDustIn speculates as to whether legal issues, time, or money is what is causing Geno to not be a fighter so far.
1) Time likely isn't an issue with the DLC. They have a surplus. When it comes to base game, it's perfectly understandable, but DLC has more wiggle room. The Switch has a long lifespan ahead, and we likely won't get Smash 6 for quite a few years down the line, maybe 8-10, if I could make an estimate. The time is rife for more additions.
2) Money isn't an issue with Geno, as far as we can tell. They licensed him for the far less monetary gain and even far less fan exposure. They used him in Super Mario-Kun, and he is a base game spirit with a profile picture. On top of that, they have a surplus, and Geno's already been negotiated for to at least an extent.
3) Legal issues. Again, we can surmise that this likely isn't as big a problem as we thought. Square seems to be awfully lenient with Nintendo as of late when it comes to SMRPG. They went from never even talking about the game to references, mentions, new materials, and other such goodies in spades the past few years.
So, if all those aren't issues, why wouldn't he be DLC? Square could just personally not want him in. Then again, for Sakurai, they didn't push any particular agenda. Sakurai came to them for Final Fantasy, wanting Cloud, and while they were a bit puzzled by his choice, they allowed it. If the fans want it, if Sakurai wants it, if so many people want it, then... what is the problem?
It's a big mystery if he doesn't make it. That being said, though, it does make me think he still has a chance outside of the Fighter's Pass, even if we're getting Erdrick. The stars are aligning so well this time, even better than ever. If he doesn't make it in this time, we can't just go quieter like with Sm4sh. We have to get even louder than ever before, and in this case,
really focus on Square (and NoJ, given they chose the DLC this time).