Pokemon has just morphed into another Fire Emblem situation for Smash fans: It has a ton of content in the game already, so any more is seen as a "waste of a slot" and it frustrates those who want to see completely new franchises join. Doesn't help that the franchise is...not exactly in the internet's good graces right now given some questionable design choses SwSh made. SwSh burned a lot of people, and that resentment's kind of carried over into other things, unfortunately. It's baggage the Pokemon fandom is gonna probably carry around forever now.
With how many 3rd parties Ultimate has added, we've attracted a lot of non-hardcore Nintendo fans and people who play more than just Nintendo games nowadays. Because of this, there's a lot of people nowadays who will pretty much see anything that isn't a 3rd party addition or isn't from a new franchise as uninteresting and/or boring, because admittedly, a lot of people love Ultimate because of the insane crossover element it has now. As much as Three Houses and SwSh are my jam, they admittedly don't widen the crossover with a new series, and as much as I love ARMS, it's a polarizing game that's another Nintendo series.
And this is coming from someone who would probably get way more hyped for Octolings and Waluigi than most big 3rd parties, lol. I totally respect why people view these decisions as boring and would be underwhelming, but I'mma be honest: If Cinderace gets in this game, I'm gonna lose it with hype, so I am actually pulling really hard for SwSh content.