I would agree. It's a series that Nintendo has invested a lot into. It even got its own Nintendo Direct.
https://www.youtube.com/watch?v=-4wz7Mb8Kqw
It would be completely new to Smash. No music. No spirits ect. The 2nd Anniversary is in September so it could be a chance to add a character from the game.
It's clear Nintendo doesn't it see it that way, that's for sure. They thought it was best to just announce the series the character was from even (though, in fairness, that could have been the result of Covid-19).
One thing to keep in mind is that there is going to be a natural run-off with a second pass regardless of who is in it. Some people may have only bought in when they were excited before the game's release. Some dropped the game a long time ago. Some people don't want to invest more money or just don't have any, and even some will be disappointed with the last pass. Either way, fewer people will buy in and that's to be expected.
This could be why pass may be more Nintendo focused. If Nintendo expects sales to be less, then they can pick more of their characters for which they don't have to share a cut of the sales with. Now, the rest of the pass could be business as usual and ARMS is just an exception. We wont know until they announce the rest of the characters. But I think it's telling that they started with ARMS. The last DLC (and Smash 4) heavily featured new series to Smash. And here, Nintendo picks one of their newest IPs to be the headliner for the pass. I don't think they are "saving the best for last" here.
I've noticed there is a growing sect of the Smash Bros fandom that wants Smash to be their own personal MUGAN. This is why you hear things like "They have to have third party characters because Nintendo characters wont sell." Likewise, its also why you'll hear "ARMS is a dead series" while they mock others for not knowing who Terry is. I think it's these type of fans want more non Nintendo characters so that the series can be a "celebration of gaming." The roster people have always existed (I'm probably one of them), but it's a special subset that, rather than wanting a full and complete Nintendo game they want a full and complete "Celebration of Gaming." That's a bit harder than the former. I think that's where this thinking of Nintendo characters "aren't big enough" stems from.
Also, just to clarify, I don't think there won't be any guest. Just that I expect there will likely be fewer. As I mentioned on the outset, it's easier to draw from your own library than to borrow from others. I think that's what Nintendo is doing here and I think ARMS being the first character is emblematic of it.