I feel like arguing over the amount of merch there is of Halloween 3 is getting lost in the weeds; I don’t think anyone’s arguing its not popular enough to justify its own house. We’ve seen more niche horror properties come to the event in recent years like Killer Klowns or Trick ‘r Treat, and they tend to follow the same pattern. They start as passion project scare zones from A&D, and presumably feedback from guests and merch sales justify to marketing to allow them to build a complete house the next year. If it was just Season of the Witch, I think it would be totally reasonable for it to come to the event the same exact way.
But it isn’t just Season of the Witch, it has the Halloween franchise name on it. Those other properties didn’t come with baggage, all they had to do was put on a quality show for people unfamiliar with the source material. For Season of the Witch though, the shadow of Michael Meyers looms large, it could be an awesome house but if he doesn’t show up in a Halloween maze a lot of the general public are going to be asking where he is.
Even if they drop Halloween and just call the maze Season of the Witch to sidestep this, they run into a different marketing problem. This is already a replacement for what was supposed to be the headliner for the event pre-COVID, and it’s not nearly as popular as Eilish. Also, Universal has a Halloween reboot sequel coming out in October yet embarrassingly can’t use is as a house. But Season of the Witch gives marketing a chance to stick Meyers on billboards for HHN and provide at least some kind of tie-in for Halloween Kills.
Again, I don’t think anyone’s arguing that Season of the Witch isn’t popular enough on its own to be at the event. But because of the Halloween name, trying to ignore Meyers will either create significant brand confusion for less-informed guests or it sacrifices synergy & marketing potential for an event already down a blockbuster IP and hamstrung by rights issues on the sequel.
TL;DR: Shoehorning Michael Meyers into Season of the Witch is less an artistic argument than it is a business decision.