So a few things:
1) Sephiroth is the first character to be the 2nd unique character from a series with content already in Smash. It remains to be seen if this will be repeated.
2) It’s now blatantly obvious that series with content (character, stage, etc) in Smash are in the running to get a new Challenger Pack.
3) As Sephiroth (I can’t believe I’m typing that) is the main villain of that game, is not a protagonist which bucks that trend. That said, I think it’s worth noting that Sephiroth is among the literal most iconic villains, even characters, in gaming history.
Basically it opens up new possibilities. However, I’m not sure it’ll lead to stuff like Eggman, and it seems like a somewhat typical response we have- crazy unexpected picks throw us for a loop and gets us to assume that more picks will follow suit. That said...I would be careful will putting all sorts of eggs into a basket in that regard. It opens up the possibility, but will it continue in a big way??? Big question for sure.