In Killer Instinct, this worked very well, actually. Every character is "busted" by design, and every character's Instinct is designed to break the rules of the game in a different way. The game is considered very well balanced, though there are tiers.
It took a bit to get there, and the Roster was released over seasons and things did shift as time went on, but the final product is fantastic.
While i hate the "just make everyone" broken framing, since it leads to these pointless arguments, I do think there's more than just killer instinct, and that Crim's response totally misses the point most people are (poorly) conveying with that argument.
Some of the longest lasting and best remembered fighting games are ST, 3s, and MvC2.
All 3 games have absolutely dominate top tiers, but that doesn't matter as much as in other games. Why? Because even if you're playing gief/remy/jugg there's something fun/wacky/crazy to do. Many of the characters have actual depth, and even if your character is garbage tier, you can usually make results happen if you want to put in the work, except vs the very best. One of the most recent EVO moments is some out of this world play by a fucking Hugo main.
MvC2 is especially interesting to look at, because while half the cast is objectively unplayble at any serious level, it still has a larger viable roster than most games have characters. Yes your team will likely have at least one of the god tiers, but if you aren't looking to top 8, you can make a showing with spiral/doom/command or whatever off brand nonsense makes you happy.
And that's what the "make them all broken" framework is trying to get at. I think DBFZ is a great example of missing the point because I'd say it's the exact opposite problem. You literally have characters who's entire kit (muck like mk9) just does not fucking function. It's as if someone said "ok this will be our trap gimmick character" and all development stopped there. That's not what anyone is arguing for.
What people want are clear and unique characters who can do fun things
KI is great partly because the core systems do a wonderful job at allowing this. Yes i'll be bored watching yet another killgore vs Aria matchup, but just about everything else is super hype and all over the map. Raam and Aganos are probably THE best large body characters ever made, Cinder is a hilarious setup/combo expression guy, and Glacious/Kan are some of the best examples of zoners every created. Everyone in that game has, from the ground up, super unique kits and gimmicks even without instinct.
And it all works up until the top of the pyramid. You will actually play against these characters in matchmaking. Not 35 sessions of johnny/lao doing the same setups. It's why MK1 has tried (and to some extent succeeded) at getting the fuck away from that.