Nearly 10 years after announcement closest and most substantial "news" about it we experienced was Akuma in Tekken.

I get that SFxT were fiasco (insufficient tools to open up enemy, terrible idea with gems, on disc dlc, insufficient damage, platform exclusive characters. Capcom clearly ruined it through marketing machine and slightly less offensive options than required) I suspect that less than year later Namco decided to stop development of TxSF.
Too bad that they didnt decided to keep community informed and they have no guts to say that game will not happen.
They sayd 90% not happen or something like that. I believe 99%.