I'm usually not keen on supposed deconfirmations and stuff, but this seem as clear cut as it gets
Smash likes to consult people closely tied to the franchises in question, and it's been shown in the past they pretty much have the final call (eg. Yabuki). And if Mr. Yakuza himself doesn't want Kiryu in fears of him having to beat up women, I'm assuming Nintendo/Sakurai would probably respect that call.
Wasn't really a supporter of Kiryu personally, but I respected him and his fans, and would've totally been down with him. Either way though, I respect Nagoshi's call.
My condolences goes out to y'all who wanted him. For real, y'all were probably among the most down to earth support bases and I was honestly sorta kinda rooting for y'all.