Looks like there was an Incineroar vs Lycanroc debate last night. Guess I'll throw in my two cents several hours late.
So just to get this out of the way, I have a clear preference for Lycanroc. I love its design, and out of all of the popular Gen 7 Pokemon we speculate on, I feel like it has the most potential to be a unique fighter. It's been heavily promoted over the past two years, and seeing it get in Smash as the next Pokemon rep wouldn't surprise me. I truly think it would be a logical addition.
However, that's not to say I don't think Incineroar would be a logical addition. I've been using the anime to predict which Pokemon we would get, and while I ended up settling with Lycanroc, I can't deny how much of a push the Litten line has been getting compared to the other starters and the rest of the recurring Pokemon. Based on the concept art and the first few episodes of the anime, it's clear that the writers had plans to give some deep (and admittedly rather emotional) character development to Litten. Flash forward to today, and we're looking at a future where Incineroar could very well be the next "Greninja" during the Alola League. Truly, Incineroar would make a lot of sense to me, moreso than Decidueye or Mimikyu if I'm being brutally honest.
But at the end of the day, it all boils down to opinions. Both Lycanroc and Incineroar have gotten some deep development in the anime. Both have been pushed enough to where seeing them in Smash wouldn't come as a suprise. The pros and cons even out, and it's very difficult to make an unbiased case that one is superior to the other. The only thing you can really do is go with your gut instinct and make an educated guess.
I go with Lycanroc because I think Incineroar, regardless of his wrestler shtick, wouldn't be as unique as the former. His bipedal brawler design seems like it would copy a lot of the boring and generic punches and kicks that we see all the time, and I don't think Sakurai would go for that when the rest of his options are so much more interesting and out of place. However, perhaps Incineroar's generic and obvious moveset is the exact reason why Sakurai would spring for him. He'd be a lot easier to create than Lycanroc, and the push from Game Freak would give Sakurai another reason to feel comfortable with his choice.
Again, it's hard to argue one is more likely than the other. I think it's a close race, and neither would suprise me.