>>576619061. People still have no idea and speculate about it to this day.
2. The main theory is since Wally (Mitsuru) is a named character in RSE (and not a name-able), Kusaka didn't want to change his name to "Emerald" and if your name isn't a game name then you can't be a Pokespecial protag. Or some dumb shit like that.
3. Emerald's character flaw about "seeing Pokemon as tools to be used and nothing else" fit the setting of the Battle Frontier and its rental Pokemon and may have been better than whatever Kusaka could make up for Wally at the time.
4. Emerald is a rude selfish little 3 foot tall goblin with disgusting habits (like pissing off of rooftops). Wally is a sweet kind-hearted boy at normal height who overcame his illness after Norman's training. Most "regional groups" among the manga protags only have 3 people with a 2:1 male:female ratio. Between Emerald and Wally, guess which one is potential competition to Ruby as Sapphire's love interest, and guess which one ended up getting written out. Yes I'm being completely serious about this.
Also Wally literally was a main character (Pokedex Holder) in the original magazine run of the RS arc, he got the Pokedex registered to him and was even in promotional art with Ruby and Sapphire implying he's a protag (some of these are in the official artbook). But for the full volume editions later on, as there are alot of changes between the magazine runs and manga full volumes, Wally was retconned to lose the Pokedex and Grovyle, now making him a permanent background character. It's so severe that in the story, Kusaka made it so Wally has only befriended Ruby, but never interacted with Sapphire or other protags even by the ORAS arc.
Over 20 years later, Japanese fandom still copes to this day by including Wally with Emerald in a lot of fanart.