I plugged my Switch into the new pfSense router I built and Smash Ultimate stopped lagging offline. Menus, character selection and matches no longer have random frame drops.
I think the Switch carries open/active states even after internet disconnect and factory reset; after forwarding all 65535 TCP (and numerous other protocols) ports on my old router the Switch kept listening on them all and lagging immensely. Other posts from users have claimed WiFi autoconnect causes the lag.
I have tons of PF Blocker DNSBL for ads/trackers/bots, and only allow UDP port forwarding for the Switch. I don’t know which setting exactly fixed the lag and closed whatever the system was doing but it runs as if it is brand new, even offline, finally.