He has returned.
You can’t stretch title defense for 3 years, son.
Sure you can, I mean how often has Leon battled to defend his title so far since this series started? like 2 times?
Ash could still battle trainers regardless, and every once in a while do a high tier PWC style fight, all the while the new trainer gets inspired by Ash's battling.
Putting him in a mentor role would be retiring him from the main character position. So why not put an end to his journey instead?
It's the best way to let Ash go in a slow manner while accepting a new lead to take his place, people still like the guy and don't want them to just drop him immediately for a new lead.
So why not let him become a mentor for a new trainer like Brock and Misty (more so the former) did for him and then let the new trainer take his place in full at the end, vowing to someday battle Ash, or doing so but losing and vowing to have a rematch.
Granted that would only work 1 time, and if they didn't want to focus on the new trainer we'd need either an AU or timeskip to keep things fresh.
At the point things are at, Ash is beyond going back to gyms, and to reset him they would have to go to a level even worse than what BW pulled, and doing that would only turn more people away.
now as far as captures go, if i understand correctly it was said Ash has owned about 98 species by this point, I say 2 more tops and hopefully no 100 is a legendary.
Just make the new protagonist his kid…then you can keep him around while still following a new protagonist.
He could do it even if he wasn't related to that person too you know.