There a third route between "reboot" and "Ultimate Deluxe".
Use Ultimate as a base. They can modify the moveset of some characters if they want, or outright remove them if they have for any reason. But the engine, the physics, most of the assets, are right from Ultimate. Since most of the works is already done, they could go all-in on side modes, with a massive adventure mode, the return of Smash Run and Break the Target, maybe even custom moves or custom costumes.
Instead of "the Mario Kart 8 DX of Smash Ultimate", the sequel would be more like "the Tears of the Kingdom of Smash Ultimate".