I would imagine it would apply to newcomer and extra characters like Falco, Wolf, Lucas, etc.
Well, had Ness not been on the roster in 64, I don't think there would have been a chance at all he'd be in it now. Once Smash got huge and basically required bigger names to be fighters, a character like Ness would have been passed over.
I think Wolf may have had better chances if he was a clone. He took as much effort to bring over as any other non-clone character, and I think that may have factored into him being cut. Why bring Wolf back when you can make a new character with the same effort?
Star Fox is a funny series. Despite having only like 2 critically acclaimed games a decade and a half ago, the series is still super well known and the characters are all recognizable. Which is why I think Wolf's biggest con was that he was too unique, meaning the effort to add him was more than he'd bring to the roster, sadly.
I pretty much knew Lucas was a one time show as soon as I saw him. Under no circumstances does Mother deserve more than one character, that series is just tiny and irrelevant. It might be loved, but it should not have the same character count as Metroid, Donkey Kong and Star Fox.
Pichu was pointless in Melee and was pointless to bring back. In a game with strict character roster rules, joke characters need to really be impressive or unique to hang around. Someone like Villager is more or less a joke character, but they work so well and are so unique they make Pichu look ridiculous.
Young Link is Toon Link, I'd argue he was never cut so he's still relevant.
Roy was a fan favorite and planned for Brawl, but his popularity waned over the years and bigger and better Fire Emblems were released. Awakening was probably the nail in Roy's coffin.
Mewtwo was cut for no good reason. God, probably the biggest "what the heck Sakurai" cut this series has ever had. He follows no patterns for cut characters at all, and doesn't even fit Sakurai's criteria for cutting a character...
Ice Climbers are not gone... just sitting this one on the bench until technology catches up. No use getting worked up over them, we'll see them again in 5 years or so.
Snake was cut for either licensing reasons or because he didn't fit in the roster at all. Metal Gear isn't relevant to Nintendo at all.
Ivysaur's only reason for existing was Pokemon trainer. Awkward middle evolutions are never remembered or important, they exist for like 2 hours in Pokemon and you never see them again. She couldn't stand alone at all.
Squirtle could stand alone, but bringing Charizard and Squirtle back without Ivysaur would have been awkward. He'd also make he roster too first gen heavy.