I mean, quite a good number of your points are subjectively better or worse based on what you're looking for out of an SD Gundam game, but you're stating them as if they were objectively superior. Original story doesn't necessarily mean better story. I would rather have an in-depth retelling of the anime and manga rather than an original, but even by your admission "messy" story, especially since some of the stories represented in Genesis are not fully/officially translated. I like that the visual novel segments are dialogue heavy and don't just give brief synompses like other Gundam games (or anime games in general, really.) While I wish that the VN segments were skippable, it's not really the end of the world.
I will agree that the abilities could get a lot more OP in OW and you couldn't go as crazy in Genesis or Cross Rays as you can in this. Though, by that same token it makes me disagree that OW is more challenging assuming you actually play chronologically in G and don't cheese it by using late UC mobile suits the entire game. Also, while Overworld has around 1.75x the number of units, as I mentioned this one goes deeper with obscure mobile suits. I also feel like they just look better in game compared to OW. Overworld represents more series, so it's not surprising that it has a larger roster, but it tends to stick mostly to the mainstays of each series.
Also I find storage size and which one emulates better a bit irrelevant when it comes to deciding which is the better game. Sega Saturn is harder to emulate than Playstation 1, but DBZ Shin Butoden was a better fighter than Ultimate Batter 22. Switch version of this emulates better than the Vita version, though, if you're playing on a modern PC. Never had any problems emulating it. At the end of the day, I am a UC fangirl and if I want to revisit series without watching a 50+ episode anime, Genesis scratches that itch. I like it more. They both have pros and cons. Is OW bad? No. Is it objectively better or worse than its successors? Also no. Personally, my ranking of the titles goes Genesis > Overworld > Cross Rays (the in-universe armor rock-paper-scissors esque synergies between different eras' units really didn't do it for me, and I was not a huge fan of AU sidestories or Gundam SEED which really only left me with Wing, IBO, and 00) >> Eternal (Gacha mechanics and microtransactions always hamper my enjoyment of any title and it always feels like it's trying to sell me something or pressure me into buying premium currency...this is not true of other gamers, but it's how my brain works and makes me unable to get invested in any title w gacha elements. I tried.). If I want to just have fun crossover battles with some often ridic abilities and seeing how much I can min-max things? Overworld. If I wanna enjoy the plot while also still playing some pretty enjoyable stages and completing all the quests and subquests? Genesis.
tl;dr - You like Overworld more. But that doesn't make it the better game to every single player of both. You'll find fans of both saying they prefer one over the other in various forums and subreddits. It is definitionally a matter of taste.