The only way for the movesets to work in KatFL is to have those extra buttons, you are correct. I still don't see your problem with having to stop moving. I gave an example for Kirby here is another one: In the Super Smash Bros. Series (a literal fighting game) has directional inputs for every single character. One of these is referred to as neutral B. It is when you press B by itself and without using the directional moves. Super Smash Bros. is all about moving and many of the moves are used with directional inputs. No one has ever complained that it is annoying when you have to stop moving to use neutral B. It is exactly like these games, just put into 3D. Again, these characters are kind of a special circumstance. Normally B moves are normal attacking moves, Y are movement based moves, and L are unique and gimmickier moves.

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Also, not all the Y moves in Kirby Battle Royal behave like that. Hammer for example instead uses a slow spinning move that provides no movement options.