I think people are getting a bit too surface level with their comparisons of potential DLC candidates. Like, I get that they want to appeal to a wide audience, but that doesn't mean that if two characters have one thing in common that they wouldn't both be in the pass, or even added one after the other.
I can understand the idea that Master Chief and the Doom Slayer wouldn't be in the same pass due to being in the same genre, having similar character designs, and similar color schemes to the point where the casual audience might view one as a redesigned version of the other. I think that's a valid argument.
However, I don't agree with claims that Yuri or Ryu wouldn't be added either right after, or at all because of Sephiroth. Yuri's sword is not the length of his body, his color scheme is way different than Sephiroth's, and while they are both RPG characters, Yuri is a protagonist, and Sephiroth is a villain, which causes them to give off different vibes visually alongside the differences in their gameplay. Nobody would confuse one for the other. Similarly, Ryu is from an entirely different genre, his katana is the length of a butter knife, and he has the whole ninja thing going on as opposed to Sephiroth's angel motif. Nobody would genuinely call him Sephiroth 2.0 or whatever.
If we want to use the previous pass as an example, Banjo & Kazooie and Terry are both fist fighters, and Terry came right after Banjo & Kazooie. Nobody even compared the two characters because there really aren't any comparisons to make. They sure as heck don't appeal to the same people. Similarly, Hero and Byleth are both swordsman from RPGs, and also weren't compared because again, they aren't even remotely the same.
So yeah, while I do think some characters might not be released together just due to who they appeal to and how similar they are to each other, the threshold for that isn't as surface level as their weapon and hair color and whatnot.