Yeah I can't see this catching on big even if it somehow makes this goal that it really doesn't look like it's going to make it.
Definitely would just watch people like this. The simple controls of Rising Thunder already got me not bothering and this is just, I just literally feel it's there for people who can't do regular fighting games. I feel games like SFV and KI already do a good enough job making fighting games simple for people while still requiring some dexterity and reactions. Generally still retaining what is a fighting game. This would just feel like the EO mode in CVS2 being made into a full on fighting game for me and that would just carry 0 interest for me.
Eh, the combo difficulty is such a tiny amount of why a game takes off or not as to be insignificant. I'm a big fan of well scaling combo difficulty, but the important things for catching on are install base, looking good, and feeling good.
You didn't see many cut characters when it came to other KOFs that built upon the foundation of another before ('97 to '98, '99 to 2000, 2003 to XI, XII to XIII), so I don't see why not.