I wouldn't have an issue with Final Fantasy's and TWEWY's presence in Kingdom Hearts being wiped if any of their respective stories had been resolved...
Cloud and Sephiroth are still eternally battling across worlds while Tifa searches for Cloud.
Leon still has a past with Mickey and understanding of keyblades that were never explained, and is presumably trying to reconnect with Rinoa.
Zack's fate and lust for Aqua are still in limbo.
Auron still doesn't seem to know much about his identity and ability to form his own free will.
Sora promised to reconnect with Neku, et al. in their real home world.
Sora hasn't given a shit about reconnecting with Selphie, Tiddus, and Wakka after saving Destiny Islands.
Yozora's reality is mirroring Noctis'.
Most of these are loose threads that the series outgrew by having its own original characters and stories outweigh those of other licenses. I wouldn't really fault the series for doing that too much if Nomura just ended these stories.
Cloud and Sephiroth died after their battle.
Rinoa beckoned Leon & co. to help restore Radiant Garden outside of the main city.
Zack and Auron assist Herc in protecting and restoring Olympus, and Sora informs Zack that he and Riku are searching for Aqua. Zack's moved on over the years.
The other Destiny Islands kids could've been seeing playing in the background during any scene there, or even been a part of the beach party scene in KH3. After their home fell to darkness, I'm sure they must also be aware of other worlds and people? Especially since Mickey, Donald, and Goofy seem to chill there sometimes.
Neku, et al. can be witnesses to Sora's battle with Yozora and help resolve whatever this conflict is.
Just end a story; don't forget about it.
Needless to say, I still also have bones to pick with where we left the Grid and Toy Box in DDD and KH3, respectively. Tron was still under Rinzler's control while Sam, Flynn, and Quorra try to escape the Grid (to where, Radiant Garden?), while the toys are still enduring a split in their worldline and are separated from their humans and other toy companions, just like the TWEWY crew were in DDD.
Anyway, if FF stories had actually been resolved, I wouldn't have an issue with them loosing their presence in this series. KH stands plenty well on its own these days, and frankly, needs every chance it can to more properly develop its original characters, stories, and themes.
If FF, TWEWY, or any other SE property were to rear up in a future title, I'm still down with that. Just make them matter, and make their stories close-ended. Personally, I'd much rather that SE characters pop up as ancillary characters in Disney worlds, embarking on their own journeys, than as citizens of original worlds with their own lore.
Alternatively, I think it'd also be cool to just have other SE characters be totally optional secret bosses throughout the games. No story necessary, just a battle against a recognizable character who's decided that Sora's in their way.