KOS-MOS is a character whose original appearance was in Monolith Soft's flagship game, "Xenosaga Episode I: Der Wille zur Macht" published by Namco. Since this time, she has been established as a mascot of sorts for both companies, making cameo and crossover appearances many times across several platforms.
As for Nintendo platforms -which are most relevant to this particular argument- KOS-MOS has appeared in
-"Xenosaga Episodes I&II" for Nintendo DS (2006)
-"Super Robot Taisen OG Saga: Endless Frontier" for Nintendo DS (2008)
-"Project X Zone" for Nintendo 3DS (2012)
-"Project X Zone 2" for Nintendo 3DS (2015)
-"Xenoblade Chronicles 2" for Nintendo Switch (2017)
It is perhaps also noteworthy that both Fiora from Xenoblade Chronicles and Elma from Xenoblade Chronicles X take inspiration from Xenosaga's gynoid savior.
To get into more circumstantial points. Bandai-Namco trademarked "Also Sprach Zerathusdra" in the US 2 months prior to the official announcement for Super Smash Bros. Ultimate at E3. This suggests Bandai-Namco has plans for Xenosaga Episode III moving forward, and implies intent on their part to utilize that trademark in some fashion, such as with a remake, or perhaps a digital port to the Switch.
Regardless, it illustrates Bandai-Namco believes Xenosaga is and/or will soon be quite marketable. To lend further credence to that sentiment, a scale figure for KOS-MOS Re: was announced on July 28th of this year.
For reference, the only Xenoblade Chronicles 2 figure to be commissioned prior to KOS-MOS Re: was a coordinated pair for Pyra & Mythra, meaning Xenosaga's gynoid heroine was chosen over fan favorites like Nia and Morag, despite the limited nature of her appearance. Also, as a bit of food for thought: It is not unlikely the KOS-MOS scale figure will be completed and made available right around Smash Ultimate's release date, given production periods.
As for the design itself, it is probable the overall goal for the design was to bring KOS-MOS into the modern day, and to do so in as near to an official capacity as could be achieved without another installment in the Xenosaga series. To accomplish this, Kunihiko Tanaka (KOS-MOS's original designer) was called in. He later provided an article on the process for inclusion in "Production Notes." Two pieces of note being the core idea to display KOS-MOS as "The Symbol of Xenosaga" as well as the Re: in KOS-MOS Re: standing for "refrain", or the idea of being "born again."
It is also potentially of note that KOS-MOS, as a cameo, has been supported with further content in Patch 1.5.1 and Patch 1.5.2. She also received special character art with the release of Torna the Golden Country.
[Disclaimer: This is Purely my own Speculation]
While those points may mean little in isolation, taken in unison suggests intention. I personally find it worth highlighting that completely re-designing KOS-MOS solely to include her in Xenoblade Chronicles 2 was entirely unnecessary. Neither V1 nor V4 would have appeared out of place within XC2's aesthetics, and any alterations to her design would need be cleared by Namco at every turn. That is to say, Monolith would diverted what many would consider an excess of resources, all for a cameo. This, in addition to the scale figure mentioned prior, alludes toward KOS-MOS Re: being put forth as a definitive design moving forward, so we should expect to see more of it in the future.
(Also, specifically in regards to Smash Brothers, it is not unlikely that KOS-MOS had been suggested by both Namco and Monolith before, but that V4 was turned down for being too risque for Sakurai's tastes. This re-imagining of her is far more in line with Nintendo's philosophies.)