Didn't this already happen?
AIs have significant advantages in reaction speed however, so I bet that a properly-programmed AI will beat any human. If an AI is reading from memory (while the human reads from the screen), a decently programmed AI will almost certainly win.
The question of whether or not an AI would beat a human with similar lag delays is an open question however. That paper didn't seem to have any lag delays programmed into the AI however, and was just reading from memory IIRC. I don't see a fair way of doing this however: human reaction times are based on mood, emotion, and current state of mind.
Machines will have a consistent reaction speed, and therefore a huge advantage in any twitch-based game.
I've seen the discussion elsewhere. The CPU player is certainly good, far better than I'd expect from an AI. But there are significantly questionable moves: like random F-Smashes and other such attacks that just don't seem optimal to me.
Not that I'm an expert or anything. But its clear to me that the bot has superhuman reflexes and precision (a bunch of perfect blocks that really shouldn't happen... the huge length of the dash-dances... the fact that the AI basically always "Sweetspots" the F-Air Knee). And that's its primary edge. Its strategic planning is kind of awful, and its quite evident from the match.
For example, this is extremely unhuman and basically impossible to precisely execute with a normal controller: https://www.youtube.com/watch?v=dXJUlqBsZtE&t=104s
The AI also seems unable to punish the low-recovery of the Humans: so the Humans always recover low safely. (If you recover high on the other hand: the AI is damn perfect at edge guarding so its a death sentence)