The plot of the game is that Kronika gathers people dissatisfied with the changed post-9 timeline from both past and present (Revenant Liu Kang, Shao Kahn, etc.) to help her create a new timeline, with them getting what they want in it in return (Shao Kahn gets a larger empire, Liu Kang gets Raiden to not exist, so on.). The good past version of characters are brought back as a side-effect of her pulling stuff from the past.
The game ends with the timeline getting reset except now there's no Kronika, Liu Kang is Earthrealm's protector instead of Raiden, who became mortal, and Liu Kang and KItana are co-keepers of the Hourglass of Time instead of Kronika.
So it's kind of a reboot in the sense that everyone that died from 9 to 11 is going to be alive again, but it has a different starting point now since presumably Liu Kang will have changed some stuff.
Setting aside that the limitations of Mortal Kombat are largely exaggerated, he wasn't challenged to Mortal Kombat to begin with; they fought him as part of a massive free for all where everyone constantly switched opponents. There's no proper Mortal Kombat in 11.