The lore is really simple once you accept that the original Donkey Kong arcade didn't feature Mario, Pauline and current DK, but Jumpman (Giuseppe), Lady (Pauline's grandma) and original DK (Cranky).

How are people confused by the timeline when even in the Mario Movie it's made clear that the protagonists of the original Donkey Kong arcade ARE NOT the current characters?

Lady and Pauline are not the same person, the game obviously hints at Lady being Pauline's grandma

Mario and Jumpman are not the same person

OG DK is still Cranky, Jr is still current DK (Nintendo themselves confirmed this with a Mario Kart World screenshot)