Maybe because I don't really care about the Zelda timeline is why it does make sense to me.
If Mario creators chose to shackled by the timeline stuff too, then people would probably be asking the same thing of Mario games right now. Like where do the rpgs fit in, the 2d games, the 3d games, why is Bowser bad and sometimes good, etc. And why can't each "Mario" reincarnation be this or that. Kinda glad they didnt do that...
I guess I see the Zelda the same way. In which Mario is just Mario and Link it just Link. Whether it's Paper Mario, 2D, M&L Mario, it's just Mario at root. So it'd be weird if he suddenly had a huge change.
And Link is just Link to me, whether it's 2D, 3D, Hyrule Warriors, whatever. The timeline stuff isn't really for me so it's Nintendo's Link to me. So again, it'd be weird if Nintendo's Link changed.
Even with different graphics, from Paper Mario to Toon Link, it's still just Link and Mario to me. At the base of it I don't see either of them as different people in each game.
But this discussion is getting kind of pointless now...