They've done nothing but handle the overall situation extremely well.
They've handled the game in a reasonable fashion. "Extremely well" seems a bit of an overstatement. While I agree that there were many modes that seemed pointless and unfun in Smash 4, there were things like Smash Run that I thought were an absolute blast that I hope get patched into Ultimate at some point in the near future.
As of now, Ultimate is extremely bare-bones. In terms of characters and gameplay, the game is definitely unmatched, but in terms of pretty much everything else, it's severely lacking. Let's look at the online. I'd have to say that Smash 4 had the best format we've seen to date. There was "For fun" to keep the casuals happy with items and FFA, and then there was "For Glory" with 1v1 and no items to appease the competitive crowd. Now, granted, I much prefer Ultimate's ability to customize the rulesets and not be stuck with FD stages only with 2 stocks and 3 minutes. I despised that format because the timer was waaaay too short and often resulted in a crapload of sudden deaths (in ultimate, I've only ever experienced 4 out of hundreds of battles), but I digress. My greatest issue with Ultimate's online is the massive pain in the butt it is to play with friends in any way, shape or form. You can only play arenas with one person per switch, so if you had hoped to have yourself and a friend/sibling/spouse/etc. play local while connecting to a pair of players elsewhere, you're outta luck. This wasn't the case in Smash 4. My brother and I could just make a room and have our cousins jump in from their house and we could play 2v2s etc. No more. Then we have Quickplay. I think we're all aware of the issues with this but to name a few: Can't switch characters without dropping the opponent, can't turn off GSP if you want to go full casual and inconsistent matchmaking.
As far as single player modes, sorry but World of Light is a monotonous slog of uninspired AI battles. Anyone who's played subspace emissary knows that ain't a story mode. It's better than nothing, but it is what it is. The whole spirits mechanic is overrated and by the time you have all the most uber spirits to equip, WoL has already long since been beaten into submission.
Now, don't get me wrong, the fans are very much to blame if we get our hopes too high, but holy crap was the Grinch leak a low blow. I mean, it was a fairly well-crafted hoax with all kinds of planted rumors and such, literally promising our wildest dreams.....and then we got Ken...and Incineroar....and Piranha Plant....the end. It was such a drastic plunge in expectations, I could hardly believe it. It was like being told we were going to Disneyland, but then getting dropped off in skid row (all due respect to their fans).
Like I said, as far as characters and gameplay goes, Ultimate is a slam dunk, but it's far from perfect even by the standards of previous iterations. And the reason why I say that characters are the primary source of hype is because they are the ones that rake in the casuals. There are so many people that have yet to get into Smash, but when they see characters like Cloud or Bayonetta or Joker, they start to come out of the woodwork. "Hey, maybe I'll finally break down and buy a switch to play Smash." I know this because I have at least two friends that did just that. They refused to buy anything Nintendo OR smash until that one favorite character of theirs got a sexy reveal trailer and BAM! New converts brought into the fold. Which brings me to the single player options.
While I personally don't really stress too much about it, there are tons of people that aren't fixated on the competitive/online aspect of smash. They base their purchase on how much content there is BESIDES just characters. In that regard, Ultimate has some serious room to grow. I know how much work Sakurai has put in thus far, but if we don't get any legitimately cool modes patched in later on, we'll be seeing a sharp decline in all but the usual staunch smash fans playing by the end of the year. Not saying I really care either way who's playing, but it's just a prediction.