Yeah that's what was debated. While it was originally announced as part of it the premise of the series changed and since there hasn't been an official comment stating it as part of the MCU. Like X-Men '97 on Disney+ it is included in The Multiverse Saga with the rest of Marvel Studios products but it wasn't ommited from the MCU Timeline despite other Multiverse based stories being included like Loki, What If and Deadpool & Wolverine. So it was decided to tentatively not include the series in this timeline due to it since it's announcement being distanced from the MCU timeline until it's status as "part of the franchise" and not just part of the multiverse becomes more clear.It's not sacred timeline but YFNSM is still part of the MCU Multiverse Saga
My thoughts, at Comic-Con we'll likely get a nice look at the Phase 5 updated slate and see if YFNSM remains on it and if it is that would convince me Marvel Studios views the series as a part of the MCU franchise unlike X-Men '97 despite its removal from the Disney+ timeline
Like I said personally I'm going to watch it with the MCU when I do my annual rewatch because I just enjoy the show regardless like X-Men '97 as honorary inclusions