It's not a theory. Those aren't new depictions of Genesis. Square can use Genesis in sprite form and recycle his voice and visual assets already recorded and utilized for Crisis Core. That's not the same thing at all.
If Square tried to use Gackt's face for actual new material in another video game, then they would run afoul of Gackt's copyright given how it works in Japan. This is literally what happened with Shunsuke Kazama and Konami when they couldn't use Yami Yugi's actual voice for YGO's duel terminal and new video games for several years because they couldn't negotiate or use his voice work anywhere else because it wasn't contracted. He wanted more money.
If Square wants to use his likeness for new material. They have to pay him. They can recycle assets, artworks, renders and already created work from the past but they cannot recycle his face for new IP work and then not pay him for using it. This happens all the time in Japan which is why either companies contract the use long term, or you never see it again.
This also was an issue with the Silent Hill 2 HD Remaster too, because Konami tried to reuse the original voices for the PS3 port but James' VA and others balked and demanded residuals because the characters used their motion captures and voice talent and they demanded residuals. Making a full on port for a higher definition console usually entitles voice talent to some compensation. And rather than deal with that legal grey area, Konami made a new cast.
This has happened several times in video games and companies simply opt to either throw out the voices or avoid it all together. You can't just take someone's face, likeness and mo-cap unless specifically contracted. And Gackt, a musical talent who's stage presence and professional work relies on his face, wouldn't give that for free. Square can't take his face and reuse it for an HD Remaster or new story without paying him and Square isn't going to just do that again for no profit.