Just because a sequel has fewer characters doesn’t make it an inferior game. By that logic, Mortal Kombat Armageddon was the best Mortal Kombat.

One idea might be to leave Ultimate as the most comprehensive game in the series, but spin off a subseries with a different style or gimmick, in the same way that Tekken Tag Tournament didn’t necessarily compete against the mainline Tekken games. Smash already has so many modes and so much customizability that I don’t know what would make a good spinoff, though. You could change the game style instead, such as by focusing more on the kind of fast paced and technical gameplay that Melee players enjoyed, but I think they’ve decided that the current style of Ultimate has the most broad appeal, so any changes would probably mean intentionally making a more niche title, which I assume is not the goal.

Make it available on a platform where ultimate isn’t, such as a new console. Pokemon’s already shown this works.