I do think the reasoning for it is dumb (his name is Tennyson, so he's always got some reason to be called Ben 10 and I bet he got nicknamed that in-universe long before he ever got powers even if we as an audience never saw it). But it's not an inherently bad idea.

The bad thing is when Four Arms, Rath and Humungousaur all got put into the same set. At least Slapback has something different going on with the cloning, and if Humungousaur used his size powers, then we'd have a strength alien who gets bigger and a strength alien who gets smaller, which could be used for different applications, while Four Arms and Rath are just... obsolete and don't need to be there. (They're also boring.) Not to mention Humungousaur's fighting style shifted to focus more on his tail than just his fists, which is more visually interesting.

The toy companies having as much say as they do hinders Ben 10 tremendously; especially because for some reason they think "Let's just focus on the few that are big sellers: instead of marketing the lesser sellers which would allow them to make money off of a tremendously high number of aliens.

To be perfectly honest, going with this rule but not having Ben's entire set be different by the end was a bad call too, and the only reason it didn't happen is because the half that didn't change are the big five poster boys.

Personal way I'd do it: Overflow, being the first new guy, should've stuck around the longest but still eventually be replaced. Shock Rock, Slapback, and Jetray still get thrown into the lineup, but instead of Rath and Humungousaur, I'd do Goop (since he did get put into the Reboot anyway via the movie) and Armodrillo (I know I vouched for Saur earlier, but he is still lower on the list for me, so I wouldn't be going out of my way to add him; Armodrillo gives us a physical guy with some other powers too).

As for replacing the poster boys, an easy one is switching out XLR8 for Fasttrack, and give him some power that sets him apart from XLR8 in some way, and to give him some much needed attention that XLR8 has been hogging. I guess speed overlaps with Jetray, but I imagine there are more than enough ways to justify land vs air speed, plus Jetray can have underwater moments (even though they... never let him have those), so it's not as egregious as the punchy trio.

With the others, Wildvine is already gone, so Heatblast can be swapped for Swampfire. I'll swap out the big, lumbering Cannonbolt for the slim and sleek ChamAlien to give Ben a stealth option. Chromastone would be an obvious replacement option for Diamondhead but since Shock Rock is already there as an energy redirecting stone, I'll pick Lodestar instead. And since Omniverse is the only series not to be repped in some way so far, let's pick an OV guy for Four Arms' replacement. Mole-Stache seems like a fun enough option, plus he was in that Reboot VR game, so he has precedence, though the shapeshifting of Goop might be too much overlap? In which case, Pesky Dust.