I could make a joke here and just repeat the same thing, but I'll go into more detail.
Representation like this doesn't matter. Don't worry, I understand people just flared their nostrils at me in disgust, but it's true and I'll explain.
Is Smash a video game about ideals? Yes, and that ideal is celebrating gaming. Is gaming all about minorities? Nope, not at all, nor should it be.
Is Smash a video game about representation? Yes, representing beloved and iconic gaming characters and franchises. What does that have to do with skin color, gender, and sexuality? Not a damn thing!
See, when people focus on this so hard that they just zone in and say 'Smash doesn't have enough black or female characters!' I find them to be the same people who call Sakurai racist when posting certain pictures of Spirit events without any knowledge about Sakurai as a person nor what is truly means to be racist. These people don't care about Smash as a game: they care about their agenda and ideals, and rather than making content of their own that supports this, they force everyone else to meet their standards of to suffer and be slandered.
If you care about Smash as a game, then you are able to let your ideals take a backseat for the betterment of it. We need characters people love from gaming just because they love them, not for stupid quotas to please a recently-surging way of thought. How would you feel if Master Chief never got in because we had to focus on characters from games that were minorities now? Wouldn't you find that a bit dumb? Don't you think Chief represents gaming history better than a character from Amorous? What about Crash over Floofty from Bugsnax (jesus), or does Floofty represent gaming better because Floofty uses different pronouns than most? Should a character from Goodbye Volcano High (I'm disappointed in myself for remembering the name of the game) because they are homosexual or call themselves non-binary instead of Dante because Devil May Cry is a huge series that people love?
By the by, I just did a search, and there are a PLETHORA of characters who would classify as LGBT in gaming, especially the last couple years or so (which makes sense) but even in earlier gaming there was representation. None of them are really massive parts of there games and that is fine, but some of them are and yet none of them need to be in Smash.
Here's the thing, and this is gonna get me flak but it's pure honesty: minorities are yelling about proper representation in everything...but they are minorities, which means less of them as a demographic than others. Thus, if you are in a minority, not being in every work of fiction or even not in most is actually fairly accurate if that work is based in reality of some sort: there are just less of you in general than others. You don't NEED to be personally represented in every work of fiction ever made, you can relate or identify with characters or media that isn't just like you. I'm Autistic, and I don't complain about not having enough works of fiction about people on the spectrum or not having enough Autistic people working in popular media. It's harsh to say this, but that's because I'm not so one-dimensional that the most obscure part of me is what I find to me the most important. Being who I am means a collective of different things, not just one thing in particular, and I can and often relate to characters who are not Autistic and more than not I can't relate with those who are because of how people portray Autism in media...which is another problem that pushing for representation in all media instead of making your own projects, and I'm sure people from all walks of life would agree that there is a lot of token representation in media.
If you think you need more representation, be the one to create that. Just don't be surprised if or when it doesn't go over well with the majority if you are catering to a minority. Hell, who knows, you could make massive success though. Make a game that features a black character or an LGBT character that is massively successful and maybe it will see it's way to Smash some day...though keep in mind Japan's culture as well as how people view certain communities and that Smash is 'for good boys and girls.' I'm not making claims, I'm just stating what is obvious and that you should keep that in mind.