So, I've been gone for a bit, time to give a summarized two cents.
I could see Incineroar happening, but I personally hope not. Not only do we already have a fully evolved fire starter already, but the roster of Smash is loaded with fire based fighters and other fighters with one or two fire based moves. With that, basically any other type would be better representation than another fire type.
So, grass would be the best option (being the least represented of the three main pokemon types) as outside of Ivysaur, the only other plant based moves/fighters are pikmin, villager's tree, and Lucas' stick. So Decidueye would be great, but I sadly don't think he will happen. One element wise he is already pretty similar to pit being archer based with wings. Second, I think his inclusion in Pokken might have hurt his chances. Sakurai seems like a proud man and i think when he sees someone else give a character a fighting moveset it makes him less interested in the character. Ryu being an exception as he was made for fighting games and the challenge became how to change him to fit a different type of fighting game.
So, even tho Incineroar is likely, I think the best remaining rep for gen 7 would be Zeraora. As the final pokemon of Gen 7 it is currently the most relevant promotion wise and the majority of the pokemon picked for Smash were picked for their relevancy more than anything: Mewtwo the biggest legend at the time with the most game lore, Lucario coming off the popularity of his movie. Plus with Zeraora we would have a third electric based fighter, the first two being a mouse and it's baby brother. Outside of the mice there are only a handful of electric based moves in the entire game so one more electric based fighter would provide more diversity than another fire or even another water based moveset (not as needed as more plants, but oh well)
Really, the only time Smash took a wild stab was with Greninja and they got very lucky that time as most fans agreed that he was the winner of gen 6 starters. The main difference there tho was that Greninja was added to Smash early in gen 6, as his star was rising. And honestly i wouldn't be surprised if the inclusion in Smash was one of the things that rocketed his popularity as high as it got. Incineroar doesn't have that benefit. Where Greninja was included in the spring of gen 6's life, Ultimate is happening as close to the Winter of Gen 7 as possible, gen 7 is on it's last legs and it shows. So Zeraora would be more of a send off for the generation and it's inclusion would be far more neutral. If Zeraora got in i'm sure some would be disappointed, but i don;t think anyone would really be mad. if Incineroar gets in some of his fans would be thrilled, but i think the rest would not be very pleased at all and some would be rather upset.
As fire starters are usually very popular with their die hard fan base, Incineroar is one of the most polarizing since Emboar.
Second, Incineroar may be the most popular in Japan, but even there it;s not the near unanimous acceptance that Greninja received. And outside of Japan he is even more polarizing