The ruleset we use in KSM events is pretty simple. We have sets pre-loaded onto the Wii Us; feel free to pick them. If you want a different set, either load it from your own 3ds or ask someone else to do it for you (notably, I always have my 3ds, and I field all requests sent my way). Sets 9 and 10 are designed to be overwritten and will be... though we ask people to be smart enough to pick the worse set between 9 and 10 (like don't overwrite 2131 Fox or 3211 Link that people actually pick). In practice it's no real issue; only a small handful of players ever want a set that's not pre-loaded, and when the situation does arise, it is not a problem. We actually had Mace take 2nd with 2122 Shulk at the last event which it should be noted is not currently in the project, and somehow putting 2122 on a lot of set-ups as he moved around playing in the event and working his way to 2nd place was not an issue. If a set was overwritten and you want it, request it the same way. This is also how we handle someone bringing a set-up without customs; we quickly just load up the characters we know are popular in our area during friendlies time before the bracket, and if something else is requested (which is not rare in that situation since inevitably someone's character will be forgotten), we just handle it on the spot. I've yet to see a downside, and every possible custom configuration is legal.
I think most characters have multiple relevant sets with customs legal; I don't think anyone outside of the DLC characters is actually limited to just one viable set in the sense that a character is viable at all. Like I'm trying to think through the characters with the worst sets of customs, and I still find decision points. Diddy does have a real decision between Rocketbarrel Attack and default Rocketbarrels (we have a Diddy nation locally, and they do not agree on which set is best). Jigglypuff has a real decision between default Rest and Leaping Rest. Meta Knight's High Speed Drill versus default Drill Rush is a decision of sorts. In a lot of cases a single move has a really clear best choice (like seriously why would you not use Zig-Zag Shot?), but on the same character there's always another slot where an actual decision has to be made. Individual players usually settle into a single favored set, but characters as a whole have inherent variety with customs. Likewise, customs really do increase the variety in the game just by nature of making more characters viable. People love to john about custom Villager or whatever, but I've yet to see a case of "my character was viable but is not because of custom Villager" whereas the opposite case of "my character was viable until you banned the special moves that it needed to have basic tools" comes up a lot, and when you have more viable characters, there's more variety in the first place.
I wish we already had the videos up, but I don't think we do yet. 1122 Villager vs 2122 Shulk was a really interesting match-up; it turns out that Shulk doesn't really care about the sapling too much (his sword reaches right over it anyway) while having a recovery that isn't a free gimp is pretty critical to letting Shulk actually play the game. I see situations like this all the time in this game; it just seems way, way more balanced with customs legal, and I'm continually baffled by the claims to the opposite. It just seems obvious to me that improving the average quality of options in the game will help characters who have larger flaws or fewer options in the first place, the ones who otherwise need help, moreso than the characters who already have great options. When I see the game actually played as well, I'm just more convinced. Smash 4 is just a better game with customs, and it's not better by a small amount either.