...that doesn't make sense to me.
How about just saying it's an Ultimate Universe? That would explain the hiccups.
That is what they are essentially saying, just in more words. Remember Ultimate Marvel has crossed with Earth 616 (Mainstream Marvel) on multiple occasions, yet it still remains a "separate" continuity.
That is what Hyrule Warriors is in essence, we are just seeing it during a "crossover event", rather then stories taking place solely in the setting itself.
And remember that Ultimate Marvel was an "experiment" the same way that Marvel Mangaverse was. If it did not prove popular it was going to be ditched (the same way the Mangaverse was).
That is in essence what is being done here. If Hyrule Warriors proves popular it is likely to be revisited. If it does not meet expectations it is probably going to be dropped from "future projects".
Keeping it as a separate continuity just makes it easier to do so.
And remember the one rule of these kinds of forums "Not everyone knows about the fandom you are talking about so it helps to explain a little".
So I couldn't just say "Ultimate Marvel" and have everyone know what comparisons I was drawing.
Edit:
My Zelda Recs, Ideas, and Discussion Thread has been uploaded to the Fanworks section
here. Feel free to use for your Legend of Zelda needs.
And I really should get back to work on developing that "Fallout: Hyrule" idea that I have posted in there now that I think about it.
I curse the fact that I keep getting distracted by shiny new things!