I think this is bad news in general.
For starters I have zero faith that any developer outside of North America and Europe can actually develop a competent first person game.
Secondly, it may potentially not be a first person game at all thus there's no need for it to be a game in the prime series.
Thirdly, I doubt there's many teams out there that can rival the art direction of Retro for the original Prime trilogy.
And lastly, why the hell would Nintendo screw over Retro studios like this? It's their baby. Any market failure with the Metroid series has never been the result of the quality of the games. Nintendo never properly marketed any of these games or many IPs outside of Mario, smash, Kart and Pokémon and arguably those games don't need such huge marketing campaigns to begin with.
I sold my switch shortly after Mario Odyssey because honestly that game didn't deliver as a 64 sequel like I expected and told myself I'd buy it again when Metroid drops since it's arguably my favorite game series ever but this rumor possibly being true is kinda upsetting. I'm expecting this to be an outsourced turd right now.