Okay so Daigo’s personal patch history breakdown was more or less to give examples of how the most popular versions of games tended to be the ones with some really busted stuff, but it was FUN and a lot of people could do it with their characters, but some of the games where there was drop-off in players is because despite being technically more balanced, they removed too much of the things people considered fun (even giving examples of people regularly playing the unpatched versions over the patched versions). Even if the losses from busted stuff left people salty, being able to win with that kind of stuff or overcome it also felt extremely satisfying.
Comparing this to the SFV S2 update, he thinks the characters that got buffed and have early impressions of being really good this season (Guile, Zangief, Boxer, Rashid, Dhalsim, Laura, Urien), even though they can destroy you, they were buffed in a good way and are really fun to play now. However, the ones that got nerfed heavily or unnecessarily, got their fun taken away unfairly and that’s not good. There was not enough to replace the nerfs (or a new move) to motivate people to stick with those characters and overcome the difficulty, so that could lead to a drop-off for those who feel they have no choice but to switch or quit and they just give up. It’s still a game and the point is still to have fun if you’re not strictly playing super competitively/for money, so it’s better to keep it fun for your characters even if they’re not the strongest.
So tl;dr buff the lower characters and don’t nerf the top. It’s okay to take away things that are TOO strong, but give them new tools so they can still be good and interesting to play.
Timestamped to the summary part of his breakdown (marked at 61 minutes):