Guest characters? I okay with pseudo guest characters like Zeku, Abigail(Abobo) and Poison(Linda)
Pseudo characters?
I mentioned it here
Even we had Kage having Asura is a costume. I believe I had mentioned this way back.
I would still consider Asura’s decendant

Something like Athena in KOF and Hayate in Fighting EX Layer are both decendant of deities and heavenly beings.
A male descendant of Asura not a reincarnation. Since we had Asura already as an alternate it’s unlikely to happen anyway.

Yet I’ll explain how it would work and fit in SF.
It doesn’t need also a world that needs to merge with the current events because the events would be set from far far centuries ago. All he needs to be is to be an ordinary persons that had awaken dormant power which the cause is from moons in ASF or it can be also because it was triggered by either soul power or psycho power.
He harness that power through his fist but like Hell teacher Nube that he needs to cover it, when in conflict.

But he still do transform to multiple hands when v-trigger activation like Asura.

So with that origin he doesn’t need a heavy background of involvement in the past or something like another victim of super secret organization victim as a character motivation that just recently appeared which is a common cliche in SF and other fighting games…
He doesn’t need to be a repetition of younger Ryu’s inner struggle stories. It’s better that he is someone accustomed with the power within him.
His special moves can be inspired already with the Ryu cameo in Asura Wrath
and here is…
The another one would be

Why him? Why Kevin Striker? Because his also from a far far a way future that would never conflict the past and possible major events in SF. He doesn’t need to merge the event in his time to SF or his origin game because it’s from a very far future. Yet he also need to suffer an Amnesia like Two-P, because that’s an important part of the narrative for displaced character from the future.
He has already tons of attacks and moves that can be used as his special moves
- Sonic Bullet - a projectile attack
- Back Flip Shield -
He can be accidentally transported in the wrong time from a huge future mechanism stays in the future not something that he caries the technology with him to avoid any possible conflict in the story like bringing time travel as an issue in SF.
He still remains with the same origin and background without also needing to change because everything from him and his time is from a far far away also, so like the Asura decendant they are not heavily tied to their origin game but rather those were just separate events that can never ever conflict whatever in SF timeline is possible to reach.
The question is now WHY? It is because it’s from a past and future that cannot be a present time to any previous existing SF characters,
We can have some time Time Cop, and the One vibes here
We can also add Two-P in the mix to add flavor in Kevin Striker’s character. Like they remember each other as friends or rivals but still had amnesia for major events in the future, so they had no idea had in history or what would happen to SF characters in the future.

Which makes now remember the Demolition Man where Sylvester Stallone is against Wesley Snipes that both are displaced individuals in a very different environment.
But instead would end up as friends,rather than rivals like in Double Team.
This character as pseudo guest characters are still okay with me because they were originally easter eggs in some way in previous SF games. that they either crossover or an SF character di a crossover and camero in their game.
Yet those kind pseudo guest characters with those kind of writing look complicated at first but I mean could still add more. For example
How do I put Cyberbots character to be a guest character for street fighter V?
Like I would pick SUPER-8 from Cyberbots?

Why Super-8 and not Blodia?
- because Devilot is so popular
- because the name saotome is also license to another anime franchise to avoid confusion
- but were not putting Devilot(She already existed as ALT) as a character but instead her great great ancestor it can be a he not a she.
Then will implement it like how Neo Geo Battle Coliseum did with Cyber Woo from King of the Monsters.

This was how Cyber WOO in KOM game which they were supposed to be mecha giants
How SNK miniaturize the character to spar with other popular characters of them from their other franchise/IP.
Yet Capcom can implement a mini Super-8 piloted in how Tron Bonne pilot her mecha.
Yet who is the perfect guest character?
If Guest characters you ask? This is the PERFECT guest character.

Why Garuda is THE PERFECT GUEST CHARACTER?
- His not tied to anyone or particular group, SO no conflict in future reference
- He can just appear from somewhere else like Necali
- He is appreciated and welcome to SF
- He is a flexible character
- Tekken did incorporate Akuma in their story but Garuda can do better.
- His presence doesn’t conflict with those with the Shadaloo and Secret Society Saga
Yet for me it is still better to have more background characters that are fighters and trained fighters to be turned as being playable than a guest character.
Man if people would say Capcom need money for guest characters and it’s not canon anyway, It’s like just saying, might as well straight up add zero, megaman, dante, vergil, nero, some darkstalkers or whatever resident evil character. If you just believe guest character is about $$$ and the story is gonna be non-canon anyway. Just go with a Capcom All-Star Fighter anyway.