You are describing a problem with fighting games, not variations, unless you know of a fighting game without tiers. The second you make players choose between Scorpion with a fireball and Scorpion with flip kick, you are creating two different characters no matter what the life bar and story mode says. First Scorpion (Fireball / Flipkick) v. Sub Zero match, the comparison is going to be drawn and on a long enough timeline a tier will be established. It has to be.What I've noticed though in mkx and 11 is there is a variation that gives you no reason to play the others. For example In mkx if you play sub why would you not use grand master. Some had 2 good ones but there was always 1 that was better and I don't think it worked as intended. Same with 11 1st when they had set variations .Some of the variations were ok but there is that one that null and voids the others.
Same with customs there seems to be set customs to pick where there is no point using anything else.
In mkx It was sold as if you like character A you can use different versions for different match ups or in 11 set your character to your playstyle and that hasn't worked imo.
That is the nature of any game with competitive content. I should hope it is proven by now that there is no way to create two different things in a fighting game and guarantee balance, whether they are variations, or interactibles, or v-skills, or assists, or rage arts, or anti-air attacks. Games like skullgirls give you a million customization options for your team and assist layouts, but there are still tiers. Still combinations that you have more reasons to play than others.
The variation system is a success because in both games that have it, EVERY single character has at least one viable variation meaning literally EVERY character is viable. No other MK can claim that, and only a couple other fighters period can claim that. Yeah, you may be forced to use Ice clone Sub Zero to make top 8, but thats a whole lot better than MK9 where you couldn't even pick Sub Zero in tournament unless you were as good as Brady or DJT.