This is all a question of where and when. In the 1990s, Oddworld games were big in Europe, and Abe was an iconic character. Not sure that was the case elsewhere. I wouldn't see him in Smash today (though I would like it), but back in the 1990s, in Europe, this wouldn't have been shocking. The rest of the world might have found that weird, though, even then and especially today.
Before Sonic, Sega's mascot was Alex Kidd. Who remembers him today, apart from retro gamers? Yet if he showed up in Smash, I would say "why that face everyone?" The guy was huge back then.
I wasn't "huh"'d at all by Terry. I think he's a central character in gaming history
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I was pleasantly surprised even to see him again, brought back good memories.