I've also personally fiddled with a few things here and there just to sate my own curiosity, but having some level of coding knowledge (not MUGEN, just some things I learned back in school), I can definitely see some major problems with making background characters interactive.
First off, if anyone were to make a deep dive into this, they'd need to make a toggle, and that basically means doing some major overhaul with the game engine. This would be more of a failsafe than anything, and it'd open up modding possibilities for everyone, not just their own needs. This could also be another reason why Mugen-Ero doesn't want to share -- he could be very well be sharing more than he bargained for, or be violating some regulation about modding the entire framework of Mugen itself. Not sure of the legality of the situation, myself. Just remember that he did it for the sake of hentai, which the original creators of Mugen might not be too fond of.
Second, it opens a whole new can of worms just having that be a possibility. After hearing about giving background characters hitboxes in recent posts, you have to accommodate for a LOT. Like, virtually every attack ID in the game from all playable characters. Because you just know that someone's gonna find a glitch where they want to do some actual fighting and their punches and kicks hit "air" because the background characters can now be attacked in some form or another. I can only guess at how much of a nightmare it would be to debug every character in Mugen so they don't attack background characters unintentionally.
Third, I can't even imagine how some of the unorthodox characters would work, let alone characters with helper characters. "Swarm" characters could unintentionally break the game and helper characters would need to be altered since some of them would always miss otherwise. One specific instance would be Kuromaru's "inudog" attack which has the doggirl run across the bottom of the screen until it hits someone, but what if someone wanted to have the "inudog" hit a pole dancer positioned at the top of the screen?
Yeah, Mugen-Ero has good reason why he wouldn't share this technique. What's more, enough time has passed since he started doing this that unless he documented everything as he was going along, he probably doesn't even remember half of what he did to get to where he did and so if he did release info on how to do it, it'd probably be full of holes that no one could fill in the blanks but himself.
There's no doubt that his videos were tailor-made. The editing, the positioning, the cuts and just, everything with the production indicates he probably made many attempts to get the scene to actually work out the way he intended them to work. I'm sure if we actually saw the coding, we'd see it's probably just barely functional for the specific instances that he made.
