One of the problems is that there are many variations semantically which aren't as similar as they seem. Sometimes people appeal to extremes for the opposing side, choosing the worst interpretation.
There's a reboot, and then there's rebuilding. The former, to me, implies taking Smash in a new direction, presumably with a much smaller or very different roster - which I think if it happens, will happen concurrently as a spin-off to Smash, not replacing it.
The term I like to use is rebuilding, though it too is imperfect. Because starting over/from square one or something can lead people to infer a complete discarding of the existing data. But Smash games don't do that either, they just don't basically keep going like Ultimate did with Smash 4. I think they will use the data for reference and other initial placeholder-type functions, but will essentially rebuild things, like they did prior to Ultimate. There will be some new hook(s), but taking Smash in a totally new direction is too drastic for a sequel.
But even on the other side, I think Ultimate Deluxe is generally envisioned as a port like MK8D. Where it's clearly the same game, just with more stuff, and maybe some tweaks here and there. But in theory, they could do what they did with Smash 4 and Ultimate again.
They could change the aesthetic, alter the mechanics, and rebuild around the roster, but keep all that same data. Change enough that it can be a new game. That would solve the problem of ports not selling as well as new titles. That would also enable them to hold content to bring back as DLC. Shady as that would be, their hands might be tied regarding third-parties adamant on getting back-end cut on their character. Given with a port, the expectation would be no cuts, and everyone, including third-party DLC, in base. But that is easier said than done, from a negotiation perspective. Which is another reason I don't think an Ultimate Deluxe to be in the cards. With this, they don't have to aim for EiH, but can ultimately still retain most, if not all characters, eventually.
However, that doesn't address the technical side, where directly using Smash 4's data will become more inefficient and more costly as time goes on, and eventually it won't make financial sense to not start over. These games are now created with a multi-year roadmap of content rollout, so the fact that they may end up approaching 2030 while still using framework from 2012 would be a red flag. It also assumes that Smash will have the budget to license both all the existing third-parties, and all the new ones a full sequel would entail; of which, presumably, there will be many. Smash has a big budget, but that's still quite a pricetag.
I don't think that's what people are suggesting with an Ultimate Deluxe. I think they're suggesting a more straightforward deluxe port with no cuts. However, I think it's likelier than an Ultimate Deluxe. Though less likely than rebuilding the roster, because that's inevitable. It's just a question of now or later.