Well I still technically haven't gotten a character Right yet
I didn't think Sephiroth was impossible. He was actually on my Radar, He just wasn't at the top of my Prediction list. I did think we'd get some Type of RPG Character considering the Mii Costumes left, and we might have also gotten a Katana character. Sephiroth fits both these models, but I won't say I Predicted him because I wasn't concentrated on Sephiroth at the time
From Some Observations I Have
-In Terms of Indie Characters, Most of the Indies represented are only 1 Popular Game at the moment (that's fully Released). Undertale, Cuphead, Shovel Knight all to extent fit this mold. They have/had Expansions that are released or in Development, but at the moment just one game and haven't full shown to Survive as a Franchise
There's 3 Indie Franchises that have lived on as Franchises. Touhou, Shantae, and Five Nights a Freddy's. 2 of these have had no Presence in Smash yet, and that's kind of Egregious considering how Big FNAF is, and How Big Touhou is in the East. Shantae only has a Spirit, and with stuff like Matt's Silence on Reddit AMA, and Going back to base game content and updating, Shantae could possibly get more
Minecraft might also be seen as an indie, if the Copyright is any indication. However it's unknown at that front, and Nintendo might Recognize that not everyone Recognizes Minecraft as Indie anymore
-If My 201X Theory is still in Play, We'll get at least one more Character that Originated from 2010's. Min-Min and Steve are considered 2010's Character (Steve origin is based on Java release in 2011), But we still haven't gotten that Tourney yet. Besides FNAF which was already mentioned, A Few Prominent Shooter Characters fit this mold. Fortnite, Apex, and Overwatch fit this. There's also Danganropa. Overwatch might be Deconfirmed though
-And following the Same Logic of the 201X Theory, We might also still get a character heavily Based around Projectiles. Reimu from Touhou, Any FPS Franchise, and Potentially KOS-MOS from Xenosaga fit this model
-I'll be honest, With Sephiroth in, I'd be more apprehensive of another RPG Character being in. Not Impossible, but just keep it in mind
-Square will definitely get costumes with Sephiroth being in. In this Fighter Pass, Sega and Capcom currently have not had Costumes added in yet. Namco and Konami had Costumes added. Konami's were completely new with Bomberman
-Sephiroth, Like Steve, is Probably another character that was Planned further than initially expected. He was on that Square leak from 2018, and there been murmurs about him for awhile.
-If the Fighter Pass follows the Same "Save the big stuff for the beginning", than the next Characters are either Smaller in scale or More Controversial. This might make the idea of Characters like Crash less likely, however also consider that 3rd party negotiations are different thing, and that might affect when 3rd party wants their character revealed.
-Sephiroth and Steve kind of Represent the East/West Dynamic that Hero and Banjo did Previously. This time though both the characters are both more universally geared towards both Regions, and aren't as Extreme as Hero and Banjo were.
-For Rumors, Ryu is still in Question, The League leak is Also kind of in question as well. The Falcom leak is also in Question as well. This new 5chan leak remains to be seen.
I Need to see What Sakurai says about how Sephiroth Got in, and I Also need to see the Mii Costumes, but this is my Speculation for right now