I honestly viewed their release of the time line as them saying one of two things.
a.) they have now finished the story of zelda, link, and ganondorf that we've known since the original and will now focus on some other, new time line. (much as i hate to say it this would mean reboot basically)
b.) they can do whatever in the hell they want because a fallen hero timeline could exist at ANY point in the overall zelda time line.
Considering that Hyrule Historia pretty much outright says that the timeline is a work in progress which is going to keep getting additions, a reboot is pretty much out of the question. They haven't done any rebooting over the last 25 or so years, so why would they start now?
And the flesh you so fancifully fry is not succulent, tasty or nice It's death for no reason, and death for no reason is murder
The whole "gameplay first, story later" thing is specifically Miyamoto's mandate. That's how he likes to develop games, and while he has trained all of those under him to follow it as well they may not necessarily agree with him completely. In fact, it has been known for a while now that Aunoma actually is more concerned about story and continuity than Miyamoto is. And for a while now Miyamoto's position in the development process has been somewhat removed from the day to day operations of the team, leaving Aunoma (and the "new" guy Fujibayashi) to call the shots.
And the timeline has actually always been there anyway. It just wasn't a primary concern and it hasn't been the first thing they look at before starting the next game's development. They won't enter development saying "this game will tell this story that fits in at this point in the timeline". They work on some general concepts and flesh those out a bit before they start asking where what they've started to create could fit in and they work in an appropriate story around the framework that they've already got.
This really shouldn't need to be said, but people seem to miss this point anyway. The timeline is only a record of what they have created so far. There has never been some sort of grand plan where all of these games' stories had been planned out 25 years ago or any other nonsense like that.
"This ain't like fieldwork. You never have to notarize a man and kill him in triplicate. Well... Almost never..." - Ruby
Do they sit there and fret over the timeline? Any one game's allusions to the other games whether they take place before, after, or in an alternate timeline/universe have usually been limited to text, an npc, or a picture on a wall. It's not like they design dungeons or side quests and make sure the game fits in in perfectly to it. I don't think they're dumping hours and days into it. Just a quick little "let's do this here for the fans" moment and back to the big stuff.