the Palanquin ship became Myouren Temple, and In HM, somehow the temple is back being the Palanquin ship.
Or that could be a different ship.
Personally, I don't quite think that just by having them in the Background automatically disregards them from being Playable.
For Example, in Ougon Musou Kyoku, several, if not all of the playable characters (with the exception of possibly B. Battler) appear in one or two stages as BG. If you select them, the are not there however.
Maybe the same will happen to HM....
As was pointed out previously in this thread, if such a system were to be in place, that would mean that Reimu could appear at the Hakurei Shrine if Marisa and Ichirin was fighting. I even think she'd want to be present if a fight were going on at her shrine. However, she isn't.
This doesn't rule out the possibility to of background characters being removed from stages when fights are going on in that stage. Maybe the feature has yet to be added. However, it puts pressure on the idea.
I don't keep up with fighting games but I do know about this feature from Ougon Musou Kyoku. The question I have is if this is a normal feature in fighting games these days? I'm not sure how hard it would be to implement but if its standard in fighting games then the developers would look like slackers if they didn't include it.
Also, a thought that I'm not sure has been brought up yet. These fights can be determined by how much you please the crowd, right? That's a rather interesting setting for an evil plot to be going on. Like, what if popularity were a feature in Scarlet Weather Rhapsody, who in the crowd would back Tenshi? It makes me think as though big bad, will have to be a little more deceptive. Perhaps she will (do I dare say) masquerade as something a little popular so that she has a chance at winning fights.
Something else: Does ZUN consult anyone on the english names. Is it worth our time trying to think about what a Hopeless Masquerade would be like and how that might be depicted in the story?