Wait really? Sorry I’ve been out of the loop in speculation for geno, how did his chances go up?
It's less about his chances going up and more like they never went down. I know it's weird to think that another Square character other than Geno getting in for a third time, second time in this DLC, and his costume showing up with them isn't bad for his chances, but it was all a mindset that was so focused on the Mii Costume itself that we never stopped to think about whether or not that costume even mattered.
First off, Mii Costumes do not deconfirm, and please do not let the majority pressure you into thinking otherwise because they are flat-out wrong. At best, the only argument you can make is that brand new Mii Costumes deconfirm and Premium Costumes that are clearly made to look just like the character definitely deconfirm, but not only is that not a 100% for this Pass but it means nothing should we somehow get anything after this pass. For example, I would say that the odds of Travis or Sans getting in as playable in this pass are slim to none, with Travis having a better chance, however they aren't 100% out of the running.
However, this doesn't affect returning costumes at all. Why? Well if only a couple of them had shown up by now, than maybe it would matter, but the only one we are missing now is Lloyd out of ALL the old 3rd party costumes from Smash 4. This shows clear intent to return ALL of the old 3rd party costumes from the get go as a way to make the game feel more complete and to make all these companies a bit more money, which while you may consider these costumes when picking characters, honestly if this was always planned it's not a smart business decision to let this impede who you negotiated for as playable. Keep in mind that since NONE of these costumes were in base game, this means that sometime around March 2018 is when they started work on negotiating for the return of these costumes, right alongside characters. This means that either all these companies said no to the costumes being in base game, or they weren't even asked about that during base game development. Regardless, this screams 'let's make sure we get all these 3rd party costumes back into the game' rather than 'let's only grab the ones that fit with our character choices.'
If that was a bit confusing, let me try to summarize: Reusing assets for resale is much different from making brand new content from sale, and since we've gotten all but one of the costumes back, it's clear that there was an effort made towards bringing all of them back rather than an effort to only bring back certain ones if it works with character negotiations.
In addition, Spring Man's costume didn't stop him: Spring Man was both an AT and a costume, yet despite being the most voted-for ARMS rep in the Mega Smash Poll of 2020 and the obvious choice, ARMS was out for so long (ARMS was a year old four days after the 2018 E3 Nintendo Direct, a mere three months after we know negotiations for DLC started) that when in combination with the request of Kosuke Yabuki and Min Min being the fan-favorite, it was clear she would win out over him. This means that Spring Man didn't get included only because of development timeframe and if ARMS had gotten a character in base Ultimate it would have been Spring Man. Rex is in a similar situation: it wasn't his costume that cost him being playable, but the fact that the game couldn't handle two or three characters with such graphical detail to their models active at once, forget multiple players picking the character. Factoring that in with how the Blades are very popular
waifus characters and knowing you can't cut either of the girls both because of their popularity and character mechanics, Rex was the clear choice.
Once you lift the veil the community places before you on Mii Costumes, you can look back at all the things in Geno's favor and it seems nigh-magical Christmas Land: How big of a demand he's had for a long time now, the fact that Sakurai knows about this demand, the fact that Ultimate went crazy on long-term requests in base game, how Pass 1 gave two characters that fall under that (Hero and Banjo), how Pass 2 doesn't have a character like that yet, Nintendo's relationship with Square getting better and better, the fact that he's a Mario character and we had that lackluster Mario 35th, the fact that more Mario content came after the anniversary celebration and the rumors of more Mario stuff, CacoMallow still not being debunked or confirmed...there are likely many more things I can't recall at the moment.
The only thing I would say that someone can bring up that could be bad for him is Sephy already being in the pass and his costume coming with him instead of with himself. However, the same company getting more than one character in a single pass, while a pattern for sure, is still just a fan rule (which Nintendo has broken themselves already, but of course the argument has been moved to 3rd party only) as Nintendo can double dip with a company if they want to. In addition, costumes have a lot of set conditions: they have to be negotiated for and scheduled to release alongside certain characters with little to no straying from those agreements, and how many costumes that come in a wave have to be pre-determined, among other things. When you consider how Square only allows THEIR content to show up alongside THEIR content, how some waves have more than others, and how Final Fantasy is clearly very difficult to negotiate rights for, this shows that negotiating for the rights to make Aerith, Tifa and Barrett costumes was as far as they could go for new costumes and thus they negotiated for Chocobo Hat and Geno's costume to neatly wrap up the bow on old Square costumes.
This could mean that there is no more Square content in this pass, but it could also mean that Geno is either coming with enough new costumes that they couldn't fit his in there and thus it worked better with Sephy, or perhaps Geno is getting treated like the Mario character he is and he's only coming with 1st party costumes, thus the Square costumes had to come with a Square character. It's also possible that Nintendo actually got the rights to him or SMRPG stuff behind the scenes and Geno IS a 1st party character now, but perhaps he wasn't when the costume was negotiated for or some weird licensing issue where the costume is still 3rd party because when it was made or something. I think the first one is the most likely and makes the most sense.
When you think about it, Geno could easily fill up 5-6 slots, and that's if he's even getting that many to begin with. new SMRPG costumes like Mallow or Smithy could easily take up 2-3 slots, not to mention potential other Square franchises like Nier, Chrono Trigger or TWEWY filling 2-3 slots, the chance of a Premium filling a slot, and the chance that Lloyd's costume could fill a slot. Considering Geno is both a Mario and a Square character, there is really no reason not to go in hard with content to shill for more money.