This really feels like there's about 5 decisions all tied up together, and some of them are explicable and some aren't:
Move Steven from Champion to Post-Game Boss like Red in GSC: Perfectly reasonable decision IMO.
Make Wallace the Champion: Okay but why though? You could promote any character, create a new one, bring in someone from a previous game, whatever. Promoting him introduces various minor problems for no real benefit. Why make Wallace the champion instead of literally anyone else?
Replace Wallace at the 8th gym with another water-type specialist: NO. The gym is already ice-themed, or it could be redesigned. The latter third of the game is already exclusively fighting swimmers and wild Pelipper, there's a water-type Champion now, and the Team Aqua boss fight. No reason to increase that focus by making Juan water-typed.
Make the replacement Wallace's former mentor and almost identical to him(elegance-referencing Coordinator): Please try again, and do your own work this time.
Keep Juan's team almost identical to Wallace's: If you have to do this, then you should really add more variety of water-type mons to the game.
As
R_N said, it's possible the Wallace/Juan swap was a last-minute change and I don't like that. Per the Wiki Wallace even uses the same lines as RS!Steven at various points, which lends credence to this theory.