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The fact that they have him against Popeye means they 100% view Saitama as a gag character. Cause they're setting it up as a sort of "battle between the gags". I imagine them wanking Saitama to infinity, and using similar reasoning they used for Superman in the second Goku Vs. Superman video. "He'll always be as strong as he needs to be. Because he's One Punch Man." Something along those lines. I mean, Death Battle has gotten MUCH better over the years, and Goku Vs. Superman was literally their lowest point, so maybe I'm being a little too pessimistic, but I could still easily see it happening.