Here's what Sakurai said after Steve's reveal (according to the official subtitles):
"When thinking about new fighters for this game, we don't just pick my favorites or draw from a hat. More often than not, these discussions start by Nintendo approaching me with an idea. Of course, if I can't do that idea justice, I'll tell them no. But then someone from Nintendo will come to my workplace and say 'Mr. Sakurai, surely you can put Minecraft in Super Smash Bros. Ultimate?' while peering at me over their glasses. They make it sound easy. I guess they think this all happens by magic or something. Don't they know what kind of game Minecraft is? The wizardry required to make it work in this game... It's impossible! So, I laid it out straight for them. I said, 'Yes, I can do it.'"
While the latter part obviously feels like exaggeration for the sake of humor, taken at face value this makes it seem like while Sakurai's opinion is taken into consideration, Nintendo ultimately has the final say on character picks. Sakurai of course mentions this was the case for "this game" (Ultimate) so who's to say if it was the case previously or will be in the future.