What I gathered.
The "good ending" is 100% Canon. Literally zero way they can spin the "bad ending" for future content unless they either pull more time travel bullshit or completely say goodbye to all the legacy characters. No Scorp, no SZ, no Kang, No Shao. The only Legacy characters that could possibly carry over would be Raiden, Shang and Fujin.
Next MK will be picking up from the good ending which is obviously Pre MK1. Before Great KL lost to Goro the first time. They've been filling in that pre MK1 lore for years now through the games and other media, so they must feel like they have plenty of storylines and content to get them through another few games.
Kinda crazy but sad in a way. This entire thing kinda shows how hard it is to keep an evolving and continuous storyline going for going on 30 years now. At some point the only option is to blow up the universe and start again.
I think they had the right idea with 9 but by X had gone so far off the rails that the reboot of the reboot was the only option.
But the first timeline was built up for more than a decade. And they only get cornered when they started the Armageddon arc.
In this case they rebooted the whole thing in MK9 (which was done really well in my opinion despite some minor flaws) but then they cornered themselves almost immediately in the next game. So by the third entry they have to reboot again. I feel like the pacing in both MKX and MK11 is extremely fast, everything happens too quickly, there are too many time jumps, "power level" of the characters is all over the place, etc.
Some interesting ideas were barely developed. The Outworld Civil War in other times would've been the setting for a whole game. In fact, MKX is like four different settings happening at once.
Then MK11 brought the worst tropes of time travel and made that mess. I'm not saying is not enjoyable, because like I just said, there are very interesting ideas and things that they've done with certain characters. But everything is too brief, because it's like they keep pressing forward, forward, forward, they try to squeeze everything they have and get to the ending as quickly as possible.
One of my favourite things in MK11 was the role of Kitana unifying Outworld and defeating Shao Kahn. For once, Baraka and Sheeva had actual development. It has a lot of potential.
But in the end... that's all. A brief moment. Everything is getting rebooted again.
