Depends; if his argument is that they need a Nintendo appearance? Then yeah, it does.
If it's a bad argument that Cloud magically got in because the Final Fantasy series started on Nintendo? Then yeah, it does. It was never a good one and had no bearing on choosing the character. FF is a juggernaut series in gaming. That's all that mattered when choosing an option. If Sakurai remotely cared about the Nintendo factor(which he didn't), he'd choose someone actually with ties to Nintendo. Instead he said to forget console wars and went with the character that mattered.
Cloud did not get in at all because of some Nintendo appearances. He got in because he's the most iconic rpg protagonist in gaming and that FF as a juggernaut series was going to be represented. None of it was a Nintendo-related choice. It's almost like Sakurai doesn't give a rat's *** if the 3rd party series has ties with Nintendo or not in itself. There's always actual things worth caring about. Like the character being highly requested(which is what Geno has going for him. If it weren't for the high requests? He wouldn't be even a costume).
This stigma that Nintendo relevance somehow matters for 3rd parties really needs to stop. It's just a bad fan perception. Smash does celebrate Nintendo gaming too, of course. But it also celebrates gaming as a whole, as its own separate way of doing it. Literally the only 3rd party to get in that has any legitimate ties with Nintendo is Bayonetta, who isn't even a gaming icon(at least she wasn't when she got in. She's actually really close to becoming a low level one). But many of them were still popular picks to begin with, regardless of Nintendo history. For that matter, Sakurai's statement was "they must have gaming history". His other statement "them appearing on a Nintendo console could be considered something of a courtesy". That doesn't spell requirement. That spells the idea it could be remotely useful. And since licensing was always the issue with every 3rd party in existence, a character with a previous Nintendo appearance has a fair chance of being easier to license again since the companies worked together before. That's literally all it ever meant at any point. He has not at any time acted like Nintendo appearances really mattered at any point anyway. On the other hand, he's made it reasonably clear that being a game character first is actually something he cares about to some degree. Which is good, because that's what legitimately matters for gaming icons anyway.