But there's another half who doesn't.

Alienating. Players. Something we need to avoid. There's a reason Ganondorf is still half-Falcon.

I'm already worried enough about Isaac. We also have enough problems with Mega Man as it is.

Project M is an entirely different game than SSF2. They don't need to be tied because of Dracula's Castle.

That doesn't mean it's a good idea to throw off players who are used to a specific iteration of a character. And right now, PM Knuckles is the only Smash Knuckles in existence, and people are likely going to have played as him first.

Besides, have you even SEEN the leak? They're plenty different. They just share an U/D spec, along with hurtbox data and some animations that they share anyway.

Totally throwing this off topic, but the PM leaks are fake. The menus shown are for pre-3.5, the announcers do not match, and the CSPs (especially on Knuckles) look subpar. Totally fake. It's likely to be a BrawlEx + PM Frankenstein mod.

Pretend you're a regular guy that comes acrossa new game: SSF2
He tries it and loves it, except for the fact that there is Knuckles, a character widely known for most Sonic fans and ex-fans for being completely different from Sonic.
The game lost someone that got dissapointed with that character.
Now, let's consider how many people know what Project M is about and how many people aren't aware of its existence.
Also, Knuckles has a lot of unique abilities in the Sonic games (wall-clinging, gliding, better hand to hand combat, etc)
Making him a Sonic clone would miss lots of moveset potential.
Also, I'm sure Devs would prefer to have more unique characters rather than carbon copies of each other.
Edit:
Now that the leak is fake, I'm sure there's no point in extending this discussion more and more.
Amen.