Probably will try Unity Timeline much later down the line.
I'll eventually try it out for doing complex animations such as the character select animations and fatalities
The Mecanim issue with the 3D character select is something I've seen in 5.6, I might look into it one of these days. Most likely the update changed something regarding Mecanim and the code in UFE for the character select could be adjusted to suit it.
This is also happening in Unity 5.5 (the version I'm on) and it's a major pain in the ass right now, especially when my roster is growing. I'm just glad nothing else is broken. That needs to be fixed, big time. My current rigging works perfectly for what I'm trying to do and Legacy isn't cutting it.
As for select screens, is there a way to repurpose the character select screen code to be used on the stage select? I was watching Injustice 2, and I like how they have a stage select UI after you choose your character.