Well judging if New Wave fighters go into this, that means that the storyline would take place after SK2, considering that the new Hanzo team kicks in and the former ones graduate and or also mentor them, as for Hebijo, I believe that Rin gets those new members to replace Homura's and led by Miyabi's squad. Imagine it takes 3 years after SK2, that would make a good sense to have the newcomers defend their schools and have the originals fight as surprises based on their role (Asuka v. Fuuma, etc.).
Well for starters, Hibari would be watching and caring for Muramasa considering she finds her in the streets and cares for her with in exchange she trains to protect Hibari. Ayame idols Katsu-nee so she would train to become her and give her a taste of the said harassment. The others I have no idea lol ! Anyone can help with that. Sadly I have no idea for Homura's group should this take place after SK2 considering if no fellow student follows them or wants vengeance.
New Wave quotes them having the same ages so unless that is based of a different time frame.
If that does happen however then the Miyabi group will/should also be replaced by the New Hebi girls as well, since Homura group only just left Hebi when they face Miyabi (since in SV the Hanzou girls are still in their respective years).
This would definitely be a win for me.
However i see them being like Murasame is for Senran Kagura 2.
What I've always assumed was that New Wave's characters were just other students that conveniently don't get mentioned in the games for whatever reason. I mean, if these are ninja schools, even if secretly so, there only being five students in the entire school altogether is actually a bit weird. So I figured it was just going on off screen. Admittedly I haven't finished Burst yet, so maybe there's a perfectly reasonable explanation for this, but it's made sense to me.
As for getting New Wave girls in this, that'd be the route I'd take: Don't worry too much about a timeline, and assume they were always there, just never mentioned.
Though they could always just not use the New Wave Hanzo/Hebijo girls. Bringing in other schools introduced in New Wave wouldn't cause any issues, would it?
Personally, so long as they can add a bunch of characters while not cutting anyone out too, I'll be happy.