I've never been a huge fan of using different character transformations over multiple slots. It's one thing if you have a massive roster like the Tenkaichi Budokai or Xenoverse games, but it's really limiting with a roster like FighterZ's.
They should have made each character default to their base form and given them a transformation mechanic that slightly tweaks movesets and let the player decide which form they want. The execution would be like Ryu in the original Marvel vs Capcom: you do front, half circle, back and a punch button, and you'd switch to either Ken mode or Akuma mode (depending on the button press), which would alter your specials and supers, at the cost of 1 bar of meter. If you have a 6-button layout, that's 5 potential forms you could map to one command (6 if you don't include a button to go back to base). Mid-fight transformations are also a fixture of the series, so it would only help bolster the authenticity/fanservice.
The only instance where I see multiple iterations of one character being necessary is something like having Super versions of characters against GT versions of characters. Super would have access to the God transformations, GT would have SSJ4. They also have different character designs, models and movesets.
I am ok with making fusions their own characters, though, since they're technically different characters and not just the same character with different hair.