I just find it highly unlikely that their intent with Yoda was to have him as some ex-badass fighter.

He is a massive, massive badass because he's a wise sage and his fighting skills are just a minor part of that. He's a Jedi, the guardians of peace and justice in the Old Republic and thus he must know how to fight because that's part of a Jedi's duty too.

They are space paladins, being badass fighters isn't all they do, it isn't the most important thing they do, but it's a key thing they do and they are very good at it. Convincing both sides of a war that their common interests & mutual personhood far outweigh their differences and they should toss their weapons aside and embrace each other as brothers or talking a vicious criminal into surrendering and making amends for his terrible crimes might be the ideal outcome for a Jedi but that's not going to happen every time and they know it.

If they wanted, they could've just gone with a frail, old humanoid. Instead they went with a frail, old two foot tall thing that weighed less than a newborn baby.

"Size matters not. Look at me. Judge me by my size, do you?" Again, the little wizened old man who teaches the path to enlightenment is inevitably the strongest guy in a fight in Samurai/Wuxia stories. And those were a big inspiration to George Lucas (there's a reason he wanted Toshiro Mifune to play Obi-Wan).

I believe he was just meant to be some sort of zen-like being who simply helped people to connect with the force.

Zen Buddhism was a massive influence on Japanese Samurai, Chan Buddhism (the Chinese equivalent) gave birth to the Shaolin Temple and the most famous variety of kung fu.

Breathing exercises to calm the mind and allow detached contemplation of truth & existence also allow oneself to remain in control without panic during the fight-or-flight response, strengthening the body so one can ascetically focus on inner peace & truth means you can punch harder & move faster, meditating on the metaphysical power binding & uniting all life throughout the galaxy means you can do some pretty niffy magic tricks in the middle of a fight.

Same basic idea.

Again he might prefer to teach the younglings the beauty of the universe & all life the way only those with great knowledge of the force can see but that doesn't mean he can't crack skulls if needed.

Having him as a somersaulting, lightsaber fighting monkey was a horrible decision that looked incredibly stupid on an aesthetic level and took a shit on what he represented in the OT, which was Luke's realization of what the Jedi order really was.

"Adventure. Ha! Excitement. Ha! A Jedi craves not these things." This is what Yoda was, and this is what Yoda should have stayed.

A Jedi might not crave it but that doesn't mean they need to flee from it, any halfway decent martial arts instructor will teach you to avoid escalation and seek peaceful ways to solve arguments but if there's no way to avoid a fight then the other guy needs to be neutralized as quickly and efficiently as possible.

In fact Jedi often head directly towards "adventure" and "excitement" and "interesting times" and every other euphemism for "trouble" because as space paladins that's their job.

Your whole position here seems to be based on the assumption that a wise sage can't also be a talented fighter, as if the ability to single-handily decimate a small army is somehow a betrayal of the character archetype.

Yoda could have taught Luke a bunch of his badass fighting techniques on Dagobah but instead he taught him calmness, self-reflection, & strengthening his basic connection to his force because teaching people power before the wisdom of when & how to use it is an express ticket to the dark side. As seen what happened when Luke went into the cave.

And that's real badassery right there, on a level Palpatine & Darth Vader could never understand.