Controversial opinion, but I don't think that Michael Ancel's unethical behaviour is a negative reflection on Rayman or his chances at getting into Smash.
Character creation is not as monolithic as it would first appear, especially in video games. Someone may conceptualize and build the foundation for a character, but it takes a team of talented writers, artists, and programmers to actually bring the character to life. This becomes even more complex when you factor in that characters evolve from game to game and every game has a developing team consisting of different people, the modern character of Rayman has a lot of fingerprints on him that aren't Michael Ancel.
Even then, the quality of the art is no reflection of the artist's character. There's a lot of good art made by bad people and a lot of bad art made by good people. Roman Polanski is a brilliant film maker, but a person of despicable moral character. Polanski is actually a great example, seeing how there's a mountain of talented actors, filmmakers, and musicians who are, at the very least, morally questionable enough to downplay or openly defend his actions. Rayman is completely disconnected from Ancel's immorality.
In terms of this event's application to Smash... there is none. If Sugiyama's work can be celebrated in Smash in spite of his baggage, I don't see why Ancel's work would be raise eyebrows at Nintendo.
