I haven't seen much of it, but from the TV Tropes page it definitely does seem like it's trying a bit hard to be edgy.
I tend to like the interpretations the original companies have of characters better than most fan work or even at times licensed characterizations in general because people outside of companies tend to go "Hm, how can I make this more serious?" and then start fiddling with things that were fine in favor of less enjoyable new personalities. TWBB was supposed to be funny by being serious, but I don't really get humor out of the mere concept of something being different, so that leaves me to judge it seriously.
Nintendo games are plenty dark already, if you want to make something dark then it'd be an easier matter to bring that to the forefront than to make a seedy world in an AU. The key with most Smash Bros universes is that we don't see crime as much because there are far, far worse things going on, and even then Xenoblade has quite the long sidequest chain dedicated to criminal activity ANYWAY.
Smash Bros as a collection of franchises has ten times as much potential for a cosmic horror story or even just a regular horror story than it does for a gritty crime drama.
There
is
quite
a
bit
of
fodder
if
you
look.
Just gotta play to it's strengths instead of fitting a square peg in a round hole. Smash isn't a multiverse of pessimism in the face of the mundane, it's a world of optimism in the face of gods driven mad by the nature of their own existence, physical manifestations of evil, endless all-assimilating hive minds and wildly destructive sociopathic manchildren. I mean, why make the heroes awful people when the villains those heroes fight already have that covered?
Just because a world is colorful and funny does not make it any less dangerous. But making it less colorful and funny just kind of sucks the life out of it a bit.
And I'd say I'm bothered when people try to twist Kirby into something else as well. Kirby in particular I think is more fun for being a hero precisely because he DOES do things you wouldn't normally expect a hero to do. There's all these reasons why he could be a horrible monster and yet he's perfectly happy just sleeping and eating cake all the time and being friendly and heroic. Taking that away removes the interesting contrast in favor of overly cynical commentary.