RWB
[10] Knight
Okay, this is my problem with that idea: it's the exact same thing that led to problems in SCV. V tried to have it both ways by bringing back too many veterans instead of just biting the bullet and starting fresh or aging people accordingly. VI bringing back EVERYONE for the roster in-canon despite the timeframe making no sense creates the same kind of problems. Either save some characters for later (either through SCVII or DLC) or get used to substitutes. Trying to have your cake and eat it never works. Furthermore, it would just lead to the narrative being overstuffed (which is the exact opposite problem of V) considering they've already confirmed they're doing a story mode.
We have no idea when Setsuka actually set out. For all we know she was already after Mitsurugi in 1584- she simply wasn't shown to us until 1590. The timeframe straight up isn't an issue here. Stuffing in an extra character when they aren't needed is a bad idea as well, and putting in Shugen over Setsuka is entirely unnecessary. It would be replacing her(or I guess Alpha Pat) with yet another new character when you could just as well put in the original.
Shugen is a terrible idea because again, his death is supposedly in 1584(meaning he's already dead in SCVI's timeframe) meaning you would actually have to retcon his time of death just to exclude Setsuka(who has no good reason not to be in).