I'm thinking of all the different ways the MK story can go from the ene of MK11, and the ultimate conclusion I have is that there are many paths that are logical and have good potential for story telling... and NRS is going to totally disregard that and go with something completely random and unexpected.
So instead of saying where I think the story should go, I will say one thing I think it needs to drop; the whole multiple timelines thing that started with MK9 and culminated in MK11.
The multiple timelines thing may seem to have some positives at the surface level, such as:
-it gave them an excuse to retell the original trilogy, but (sort of) justified some of the changes.
it makes it easier to fix unpopular choices. For example, the revenants weren't very cool, so it allowed them to bring in Liu Kang, Kung Lao, Kitana, and Jade before they became revenants.
It did allow for a few interesting mashups between characters and their past selves.
However, I think multiple timelines truly does cheapen the story and makes it a lot more disjointed. For example:
it takes the easy way out of resolving unpopular choices. This is the other side of the first benefit. For example, most of the revenants never got a solid conclusion, because the writers just decided to bring in their past selves instead.
Death lacks more weight than ever. MK has had ways to bring back characters for years, but bringing then back from the past is the worst. At least with resurrection, the characters can be affected by their own deaths, i.e. dark Raiden, Zombie Liu Kang, or revenant Jax. Bringing them back from the past means they never experienced any affect from their own death and resurrsction.
-Story progression becomes meaningless. Years of lore and development can be undone at will. Character arcs can be deleted or abandoned at will. There is the risk that all of the story up to that point will no longer have any meaning.
My proposal is this: going forward, no more alternative timelines. Either a) pick one singular timeline to focus on exclusively, or b) do a brand new timeline that also serves as a hard reboot. Use it as an opportunity to reinvent the characters however you want, and stick by it. If you want to undo something about a character, explain it well and make it earned.