The quote I linked to was a year old. At that point, a year ago, Choice of the Villain had been a WIP for 2 years.
I have no idea if Diabolical was previously Villain. We are not allowed to discuss the specific details of beta-tests in public. But Jason does describe Diabolical as
The trouble with offering that sort of choice is that you don’t always make the better game for it. A game focusing on letting you be something similar to Venom/Carnage would be so different from one that lets you be Doctor Doom or Lex Luthor.
I think in those sort of games it’s better to be more specific and therefore you’ll tell a more compelling story. So, either tell a story about a villain with the base, the minions, the plans to conquer the world, or tell the story of the smaller scale villain that’s going it alone.