Disclaimer: the following post isn't directed at any one person. Except for the first line, I suppose.
I seriously doubt the hot issue why people would be against Palutena customs is because they have to flip a switch in Smash mode.
No, it has to do with preparations. Setting up the sets beforehand, unlocking customs on the 3DS, then making the sets (which takes hours to go through the whole roster with a list in front of you) porting those sets to wii u systems (potentially as long as an hour per wii U, never had to use a 3DS for this myself), double checking each set is properly named and has the correct moves, make those corrections. This is a lot of prep work for a tournament of this size, and that's only the work done in the weeks before. In the months before July, there would have to be a re-evaluation of all characters to make new sets. Some characters have to make precious use of their maximum of 10 sets, while others just need two or three because their move pool is awful. No matter which character, this research and discussion takes a lot of time and is honestly not easy. Because our experience with customs in the first place is so limited, and everybody wants to take maximum advantage of this opportunity. And Smashboards does not, nor would it ever accurately represent the whole of the Smash community.
And Miis are naturally the biggest nightmare. There's infinite variations between height, width, and moves, and no cap on the amount of sets. So of course the mii players want to make up to 50 to cover every possible option, which is a lot of jumping back and forth between the game and Mii Maker. All that work for the three or so Swordfighters or Brawlers who are attending.
Please don't force yourself to misunderstand why people don't like the sound of customs. There's a lot of other, less objective issues, but they mostly boil down to civil unrest with the players. Doing research on 58 character Matchups is already taxing to the aspiring player, but all of those (minus DLC), plus their up to 10 variations? And you have to memorize moves by number? You could probably tell me what a Villager or Rosalina custom set is based on its number, but what about Kirby? Falco? Robin? And as a followup question - can the average player do that too? And don't say it's their job, because there's no fast and easy way to discern why one character's player base chose one move over another, unless it's something overwhelmingly better than the default.
So, when they group the inclusion of miis with the inclusion of customs, it makes perfect sense, since they both require this much effort and difficulty, and only having Miis and Palutena use customs would be totally exclusionary and unfair. Whatever opinion you or I have regarding customs is meaningless in the face of the burden it represents on EVO and competitive smash bros. They need representatives to take an objective look at the concept before they decide. Let me repeat, this is not an argument for or against custom moves, I'm just tired of all these singular perspectives on the issue.