Curious enough, the "retro picks" in general were actually chosen more for a surprise factor tan for being retro. Sakurai has mentioned he likes adding unexpected chars. If anything, a surprise pick should be what fans should look out for.
But there are too many Pokémon. They have to pick some of them for more important roles. Just based on the leaked images of the SM starters, they had already decided ahead what would Ash capture and eventually evolve. The anime, the depictions in the game, the TCG, portrayal in side games, etc. are all things that need the Pokémon Company to play favorites and pick which ones they think have a bigger chance of gaining a following. Yep, it is a hit and miss strategy but it is a necessary one if we take into consideration how many Pokémon there are. And being fair to Incineroar, he wasnt as obnoxiously pushed as past Pokémon. There are reasons why people though that other Pokémon had a bigger chance than he did. A least going by Sakurai´s words, he liked the character, so it isnt like he was forced to take that one Pokémon. He saw a chance and seized it.
As for the reason, they leave a spot for Pokémon, it probably has to do with the fact that Pokémon is kinda different to other first party games, It is unusual in many ways. Their smash amiibos are less useful than the rest. Pokémon rarely do crossovers and it is hard to find them even in other Nintendo games. They seem to do their own thing most of the time. And considering how big Pokémon is, they probably decide to leave a space for them to put something recent to promote the new games. Mario and Pokémon are the only two franchises who have gotten a newcomer each game because they are the ones that sell the most. The difference is that with Pokémon, the priorities lies within the new toys available rather the old Pokémon from previous gens (unless they are gen 1).
