Wot.
Setting up from N-air or U-tilt is not 'reliable' considering the former is hella unsafe on shield for the late hit and the latter is kinda underused in Luigi's kit itself for the reason D-smash is also suffering from the same problem, it can't be used out of a run. Even if you did land those moves, B-air isn't really killing anyone unless they are at the ledge or something.
Wait... I thought Luigi could still try for Bair setups from D-throw? So many characters to follow, so little time... Also, still think Luigi's Down Smash is really good. You might not be able to use out of a run because of Luigi's low traction, but the fact it's fast and has one of the lowest recoveries for a Smash is still pretty damn good.
I'm not sure if 110% at center stage is not 'early' either. Luigi's B-air kills Mario at 140% at center of 3DS FD w/o rage. Add in Wii U blastzone... 135~%-ish? That's still quite a bit away from Falco's. Although, rage thrives more in Luigi due to his better survivability, and he hits people with it more simply because range.
You're not always KO'ing at center stage, especially with aerials. Now, if it KO'd at ~80% center stage which would probably mean it KO'd at ~60% at the ledge, then yeah, that would be early. There's also the fact that there are moves that KO much, much earlier at half the percent Falco's (and Samus's) Bair do. If they didn't or if this was discussed way back then, then Falco's Bair could be argued as a somewhat early KO move, but not now.
And yes, Luigi gets much more out of rage than Falco does even with the "low" 12 base knockback.
IMO, Falco's B-air is... surprisingly quite meh in comparison to its numbers. Yes. It's frame 4. Yes, it deals 13%. Yes, it kills nicely... but I would argue a lot of B-airs are better. Not because the move suck, but because it's on Falco.
Y'know, Falco. The one with the slow run speed and airspeed. The move itself has little range and is only active for 2 frames if you want to kill. Falco doesn't have much horizontal mobility to begin with. In the air, frame data matters less when end lags can be partially supressed by simply moving in the air, and range often just trumps frame data when you're airbone. It's not abusable as the likes of Mario's B-air because sometimes you just can't get the move to ****ing hit.
The move has its upsides though. You crossed up his shield? He can pull out a killing B-air in 10 frames right where he stands. Get hit at the ledge and you're screwed. He hit you with this move on shield? This thing has godlike AC at frame 15, which is 4 frames away from the late hit that ends at frame 11. Falco has 15 frames of land lag otherwise, which is pretty decent. You probably aren't punishing him that way. Not when his jab is frame 2 (Although, the said jab is unfortunately wonky). You airdodged inside him? Help. The sweetspot is pretty close to Falco's body. So... pray????
Overall, I think the move fits in B. Whenever I play Falco I don't feel the move to be as useful as those in A tier. I play both Mario and Doc and Falco's B-air is simply not as abuseable as theirs. I can't throw them out willy nilly because the space it does cover isn't something to write home about, whereas with Mario I can go flying to North America while spamming B-airs all day and with Doc I'm basically a kangaroo on fire.
I'd argue it's both the move and Falco that's "bad" about his Bair. You cannot have a move like that without consequences. Yes, this also applies to Limit Break Cross Slash where you have to charge and use up meter or input Shoryuken where you have to learn and be able to consistently input it. Falco's Bair
has to be bad for it not to be broken. Gearing it towards pure offense with its frame data: frame 4 startup, 13%, 130 growth clean hit, and good auto-cancel, gets balanced by its clean hit only being active for 2 frames, average 27 recovery frames -- technically 33 frames if you ignore the late hit --, average 15 landing frames, and short range. If you gave this move to anyone else, it wouldn't be any better. Another character can make more use of it perhaps, but it's still the same Bair with high speed and high power, but short range. ZSS with Falco's Bair would halve her startup, but also halve her range. It would also remove any benefit of rage -- drop of 42 base. She could probably setup with it and she's faster in the air, but she still needs to close the distance by moving which could take more time than inputting Bair and having her Bair reach with its range. Now, if you gave ZSS Falco's Bair frame data and perhaps modified it, so she could keep the benefits of rage or whatever, then yeah,
her Bair got better
not Falco's Bair being better on her. Her Bair would be faster, stronger, have less recovery, better auto-cancel, and have a late hit for a safety net and potential resets while keeping its amazing range, benefit from rage, and lower landing lag. Like I said much earlier in my spoilered opinions, have fun in Hell.
For Falco, his Bair is essentially on Guile, a character who isn't meant to approach, but zones forcing reactions he responds to. Although this doesn't work in practice because Blaster is a piece of crap, Bair does that really well. Falco's Bair frame data makes it really good for air-to-air combat when it's one of the fastest and strongest aerials. It also, as you said, is a strong OOS punish, especially against cross-ups. There is a reason why I always say that you never want to be behind Falco. So in a way, it has to be on the bad character while also being bad (in hitbox) to not be a broken move. You give it insane offensive capabilities while purposely ignoring utility and you give it to a character who, as a classic zoner, isn't meant to approach to contain its power. At the same time, its insane offense makes it a good defense; sheer speed and power allows it to be an immediate punish from OOS, from frame traps from Uair, against poor approaches, or on whiffs.
The point I've been trying to make is that Falco's Bair is good, but it's not the best or amazing. Specializing it in pure offense makes it less versatile. It's not a Wolf Bair where both Brawl and PM Wolf's Bair would be a better move than Smash 4 Falco's Bair. What it does well, however, is what makes it good, but there are times when people get caught up in its sheer speed and power and overlook its flaws and overlook the fact that it can be as good as it wants, but without any KO setups, coverage or range, etc., there's a limit to what it can do. Even on other characters who could find more reliable setups with it, I don't think it's any better than B-tier since you'd force a specialized move on them when they already had moves geared for them or other purposes like DK, Marth, or Pikachu's Bair or force a trade on them like Captain Falcon who would not only lose range and rage benefits, but also a Bair that can hit low in a trade for faster startup or Ryu who would have a faster, stronger Bair, but lose his Bair's damage, range, and unique animation.
Also, it has no sweet-spot or sour-spot; just a clean hit and a late hit. Speaking of a Bair that has a sweet-spot, Wii Fit Trainer's Bair... I think it's pretty good, but there are some weird problems like apparently, its sweet-spot is smaller than Zelda's Fair and Bair. You can barely see it here.
That being said, it's a frame 5 Bair that can KO pretty well. In a way, it's a mixture of Falco and Zelda's Bair where it has the damage, speed, and safer late hit of Falco's, but the sweet-spot, larger overall coverage or hitbox, higher landing lag, higher recovery, and worse auto-cancel of Zelda's. It shares both of their low active frame on the clean hit; leans towards Zelda more with 1 active frame. I think it's a pretty good Bair, but... there are potential problems that would keep it from going to B-tier.