More than anything to me it feels like a vast majority of the characters have reached their best form in Ultimate. There's a small handful of the more experimental ones that still don't feel 100% realized (yes, thinking of Little Mac), and there's always room for some buffs/nerfs, but I really can't see how you could improve characters like Diddy Kong, Ryu, Ness, Mr. G&W or Fox (and many, many more) in terms of general fighter design at this point.
So, yeah, broken record but they have three paths: 1. Keep expanding on a roster that's already top quality, 2. Drastically reinvent the main mechanics of the game and every single fighter along with them, justifying a smaller amount of content with the game almost being a new beginning;
Or, the one that everyone here seems to want but which is also the lamest solution, 3. Phone it in by throwing in a bunch of arbitrary changes to some movesets in the vein of More References!!, by adding a couple of new single player modes that nobody is going to still be playing two years after the game's release yet again anyways, and by hoping that the Smash brand power is strong enough to still be as successful as Ultimate. This time.