This is something I definitely should have contributed a while ago, but here we go.
Overall, the propositions in the OP seem generally okay by me. However, I should really point out some of the arguments against it, particularly the ones pointed out by SomebodyData.
It seems that a lot of the issues involving these proposals comes from certain statements from the
Canon page, such as:
Main villains from non-canonical movies of
Dragon Ball,
Sailor Moon,
One Piece and the like can be allowed profiles,
yet most versions of Son Goku contained in games such as Shin Budokai should not, as the only difference they hold from Canon Goku lies in their extent of power. However, given the prominence and popularity of Dragon Ball GT, alternative versions of Goku and Vegeta from this continuity have been allowed.
If the alternate non-canonical version of a character is notable enough in the sense of having their own feats, and a different role and purpose, then it is possible that profiles for them can be created.
Now, the main argument against something like Smash Sephiroth is that, by all regards, he seemingly holds no plot relevance in the game. This is particularly so due to his presence as a DLC fighter, meaning he is not weaved into the initial plot of the World of Light campaign, unlike other newcomer characters such as Ridley or King K. Rool. And standing on these grounds, yes, this is a valid case to make, especially since using the reveal trailer is a bit iffy on a scaling front, in my opinion, and could easily be called out as an outlier regardless.
That being said, I don't think Sephiroth is entirely in blatant violation of these alternate canon rules, and I think he can work as a profile. And the answer to our problem lies in this exact same line of dialogue.
While it is true that, disregarding the whole "slicing Galeem in half" thing, Sephiroth does not really have any significant feats by himself, he is still a pretty notable character within the game. For one, like the other DLC characters, you can access him after collecting 10 fighters in the World of Light and actually play through the campaign as him if you want, being able to take on the Master and Crazy Hands, Galeem and Darkhon, and the rest of the bosses. Speaking of the bosses, his whole Classic Mode campaign is designed around specifically fighting all of the bosses in the game, something that is unique to him. Not that important in the long run, but a good note.
And finally, I believe that the best supporting evidence for him is the existence of his Fighter Spirit. Every Fighter in the game has a corresponding Fighter Spirit that you receive upon beating their specific Classic Mode run (or buying it in the shop), which admittedly has a hazy level of canonicity within the lore, but it does mean that under the context of actually having an associated Spirit, Sephiroth is on par with the other Fighters.
I can admit that none of this evidence I have presented is very "knock it out of the ballpark" levels of solid. There is still viable grounds to still be unaccepting of Smash Sephiroth here. However, I would also like to say that Super Smash Bros is a very popular fighting game, even past the likes of Street Fighter or Mortal Kombat, and I really feel like in this particular case, the combination of the game's popularity and just enough justification even for the DLC characters, in my opinion anyway, should be plenty enough reason to let it in.
At the end of the day, I'm pretty sure we're just letting our rules stifle our creativity here. And while I do agree that we should continue to maintain our Canon and Crossover standards, this kind of thing really should be judged on a case by case scenario, and I believe there is more than enough support both on a canon and community front to let stuff like Smash Bros Fighters onto the wiki.
Oh, and about MvC Mega Man X, he technically has more story involvement from the sound of things than Smash Sephiroth, so I really don't understand why he can't be added either. I feel like him "holding the Infinity Stones for about a minute to attack Ultron Sigma" is still a notable contribution to the plot of his game, and should probably fall in the same vein as, say, Katsuki Bakugou obtaining One For All or Gon using his "peak adult" form. But I don't really know, and this is just my opinion.
Really hope I didn't sound too long-winded in my explanation...