I don't really think there's such a thing as "Unfit" for Smash, the series has a lot of different tones represented. There's certainly characters who including would be in bad taste (something like Monika), but nothing that would feel out of place.
The closest I can really think of is Lucas, there's nothing offensive about his inclusion (as opposed to a certain other two characters from his game, who absolutely should not be in Smash) and I wouldn't want him cut unless Smash shed a majority of it's first parties, but it's a little bit awkward to have a character from a game that's entire message is basically "capitalism is fascism" in a game that's entire modern identity is relative to how much it hypes up it's commercials and how many soulless corporations are taking part in it.
Bayonetta and Pythra's inclusion also feels really awkward in execution - they should've censored them way harder TBH, it felt like they were only censoring them for the ratings board and not for the sake of actually making the game appropriate for its demographic.