That’s completely acceptable, although multiverse usually has some defining event / moment the caused the various fragments. I don’t really know what that could be for where things deviated between arcade canon and current canon. We pay a lot of homage to the original events from the arcade canon (some closer than others), but we don’t follow it directly even from the start. The only real constant is the characters.
We’re not trying to deny or diminish the original lore (it’s certainly fun, wild, and quirky!) as we certainly know people loved it (same with the original comics), but only make it clear that we’re not following it as we go forwards with what we’re considering the official lore / canon of Killer Instinct.