I'm a big jrpg fan, and the Xeno games just haven't hooked me.  Retro for me.

They surpassed them with Xenoblade 1 and I like Prime series a lot. A LOT. From Xenoblade to working on Splatoon series and Mario Kart games since then to being responsible for the world design in BoTW. The answer is yes. They are one of Nintendo's most important studios. MP4 could get a meta of 99 and still feel this way.

Nintendo's "elite studio" is Tokyo EPD. (Or the mainline Zelda team, EPD 3)

I think people on this forum throw around the term “elite studio” too casually.
Retro Studios isn’t anywhere close to that. A very long time ago they were a successor studio to Iguana Entertainment. But most of those guys quit like 25 years ago. Since then, they’ve mostly been a small capacity support studio with a revolving door.

Monolithsoft, at the least, is a well established studio with their own IPs, and staff that has earned a lot of fame, some among them with long lasting fanbases. On top of that, they don’t need half their work done by other Nintendo studios and contractors the way Retro does. While Monolithsoft does hire certain outsiders to do work, it’s not because they need help, it’s because of longterm relationships and artistic vision. This is why Tetsuya Takahashi has brought in Mitsuda, Sawano, and Nomura for Xenoblade games; and why Yasuyuke Honne brought in Masato Kato for Baten Kaitos.