That soundtrack could be used as a moment of despair, followed by Ash making a comeback. And, as has been pointed out, Ash has never really permanently lost against game-original characters, and Leon's whole character arc is about eventually losing to the main character. Leon even previously...
Ash's Dragonite has been undefeated for most of Journeys. It's only at the brink of the Master Class when she got her first loss. She hasn't lost that many times, overall, and still has a chance of getting a KO in the battle with Leon.
Ash is definitely using Gigantamax against Leon. He already used a Z-Move and Mega Evolution, so him using Gigantamax in the final match would make sense. I'd love to see Gigantamax Pikachu again, since it'd make sense as a reflection of Ash and Leon's first meeting, but given that Pikachu has...
They've only gotten spotlight outside of battles, outside of Infernape's brief participation in the match against Moltres. The battles themselves still belong to Ash's current team.
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