If said Paper Mario was established as some sort of new main series that more or less replaced "regular" Mario and was generally regarded as inferior to the original, then yeah, people would be confused.
And then, if after much bitching from fans, Nintendo finally released what looks more like a "regular" Mario game, only to have him team up with his very different alter-ego with a spotty track record, and the game was evenly split in half between the two characters and gameplay styles, then yeah, people would be confused as hell.
Thankfully Nintendo never went full bonkers in that regard - though 3D Mario all but replacing 2D Mario for like 15 years was almost as crazy.
I'll let that slide since I've always loved the combination of your GAF name and avatar.
[EDIT]
Wait, was there ever a Zelda game where Links from different universes teamed up and each had one half of the game? I'm not an expert on Zelda, but I can't think of any such title right now.
As for Mega Man, well... I don't think anyone is taking Mega Man as an example of how to handle a character and series.