Would make sense gotta figure they will have a new fighter for the holiday season. With the way Nintendo has been doing directs lately I excpect a 30 minute smash direct to reveal it maybe some time in mid October.
It's not a sword necessarily that ruins it, it's the fact that so many of the FE/Link clones play so similarly. For instance, Byleth's main weapon is a sword, but they a have a more varied moveset that includes other weapons, as well as the sword being one of those whip sword things.
If this is NES-based Ryu, you could have his option weapons pick up a lot of the moveset, like shurikens and boomerang shurikens, the spinning slash jump as up smash, etc. If it's 3D Ninja Gaiden Ryu, he has plenty of sub weapons he could pick from.
Tecmo has needed a rep for awhile now so I'd be cool with it. I'd prefer Angelique myself but it was either him or Kasumi and he's easily the better option of those two.