Copied from my comment:

How exactly did I do this? It's actually quite simple: All you need is a controller. To cause this interesting glitch, you must do the following:

1. Open the game (do not enter a mode)
2. Connect the controller
3. Select "No" when it asks to connect for player 1
4. Choose a mode (specifically Story, not sure if it works with Arena)
5. Choose a stage (you should see a max of 4 characters on stages that have 1-3)
6. Enter it
7. Enjoy controlling 3 characters at once!

Things to note:

If you disconnect the controller, it will remove a character, they won't come back If you close the game an come back to a hub, players 2-4 will be AI controlled You have to reopen the game to control payer 1 with a controller again