Nickelodeon All-Star Brawl is more than just Smash with Nicktoons, its developers say
kotaku.com
Basically, Ludosity was approached by Nickelodeon after they noticed Slap City. They first thought it was spam but turned out it was legit, and the game began development in early 2020. Game's going to use rollback netcode which is likely going to perform better than Smash Ultimate's abysmal online (but that's not a high bar to clear).
They also gave Ludosity a huge amount of freedom for the game, so basically all character choices were made by the studio, such as Lucy Loud, Reptar, or Nigel Thronberry playable. The only suggestion that was nixed was a character from a live-action series, Alex Mack.