People really need to quit using the term "open world" to describe 3D Mario games. There never has been an "Open World" Mario, not ever. So people pointing back to "like Mario 64 or Sunshine" when using that term, I feel, are incorrect. Mario 64 had multiple paths you could take, depending on the stars you had collected, and it had a castle hub you could explore, little by little, as well as a very limited outside area you could play around in (that was honestly only created as a quick way for people to play around and learn the 3D Mario controls for the first time).
Sunshine, while the main city would seem more "open world-ish", at the end of the day, it wasn't a very large city, and it still only served as a central hub where you hopped to other, more limited levels, just like Mario 64.
I'm just saying, I think people are getting to the point these days where they are overusing and misusing that term, "open world". The implication of that phrase is that you have a game world where you can just about go anywhere you feel like, often right from the start. In that sense, the original Legend of Zelda was a decent early example (one of the most prominent early examples in fact) of so-called "open world" (or as it was once known, "Adventure") gaming. But these days, when you talk about "open world", you're usually referencing something like GTA or Elder Scrolls. And those examples are far more accurate.
Would it be cool to have an "open world" Mario if they found a way to do it right? Sure. But I don't think a 3D Mario needs to be "open world" to be huge and epic. Those things aren't always the same.