I cannot say SF vs MK, is not possible. What I think is like I said before MK needs to give way and lose it’s appeal of violence and etc. What cannot work is MK vs SF.
Capcom All Star is the best of both worlds and the win win situation for everyone else. It’s the game that everyone can feel something especially it’s than everyone just asking to see something beyond or being curious of something.
But I’m fine with Darkstalkers. I’m not that of a fan and only played it in the 3rd of the series just like how I started with MK, I see them in the arcades but would go for Alpha titles instead. The 3rd of the series was fancy and had new mechanics that made it different also after alpha loses all the chains.
The problem was the cast that were left behind were a huge group unless they were sucked in a black hole like a metaphor and then spew by it, after the event of SF3.
The black hole was a metaphor of
The worst is for them all died.
That’s why if the choice is to move forward then the better is having a game set within SF3 timeline with mixed of new characters from SF4 and SF5 together with SFA and SF3 characters. Just making them involved in a different event, since SF3 events is kinda loose and doesn’t require strong connection other than Gill, Urien and Alex. Plus this delays aging.
Another problem is those fans that are accustomed with the traditional cast and settings but not story, timeline or narrative. How many people keep saying Ryu must have SNH as a power up instead of MU, we have seen this with youtubers and etc, they still think Ryu, Bison, Chun and Guile should be in this situation like they were still in Alpha. It’s like they still see thing like Mario should save the Princess that Bowser kidnap.
I myself wanted Ryu to distance away from SNH and be more on learning new techniques with MU. I really like Hado Kakusei instead of another story centered to Ryu struggling with SNH

I prefer iconic character not the center of the story but the inspiration and being idealize of other fighters.
that why the other options is either make a retold the Alpha with branching stories arc to SF4, SF5 and SF3 by including the characters from SF3 with the new from SF4 and SF5.
Yes SF5 did that with AE and individual stories but they didn’t put a story for other new characters that has a very crucial role in the future or having skills and powers that long before SFA events took place like Urien. Viper, Oro and the rest of SF3 characters cast. Yet they can explain it in future SF titles like they did in SFV individual storymode.
What they did right was mostly with the new characters like Necali(he appeared because the black moon), Rashid and Neo Shadaloo except Menat. They crafted the story that meant for them appearing in the right moment and in their past has no involvement with the alpha events, they probably don’t have the power that time. So they don’t need an explanation of why they weren’t in SF2 and SFA. Best crafted story is no other than FANG.
SF4 characters like Fuerte, Rufus, Zeku, Dudley and Q are easy and flexible that doesn’t really need backstory in the past/alpha and the future/sf3 timeline.
The last is SF all stars just basically all star SF characters. No debates and questions just basically everyone is possible here.
Yet in the end I would prefer the first option of having a SF title set within SF3 timeline and make the huge cast both legacy and modern involve in a different event as the center plot of the game. So it automatically answers the absence and not being involve with Gill. The biggest problem here is SF timeline in SF3 that most of the crucial characters wasn’t present isn’t acknowledge and mentioned as if the new generation was the world’s finest and the best.