Even with the game in development stages, it's never too early to plant some Epileptic Trees!
The Blacker Baron is a clone of the Black Baron.
Kreese Kreeley will come out of retirement.
It would be the perfect time for him to show off his skills and experience in the DeathWatch games. (And to see if all of the injuries he suffered really do exist, too!)
Bayonetta and Sam Gideon will appear in the game.
Considering that both Bayonetta and Vanquish are made by Platinum Games, there shouldn't be any reason why the two couldn't appear in the game, at least as guest fighters. Both of them have some pretty badass moves on their movelist; Bayonetta has her hair and can shapeshift, while Sam can boost around and has all his martial arts and weapons.
- Bayonetta does appear in-game... As a pre-order bonus.
The Black Baron had extra lives.
This would explain why he's still alive after all of his deaths at the hand of Mathilda, and after his fight with Jack. Only after his humiliating defeat to Jack did he consider bulking up a bit, becoming a cyborg like Jack, and reinventing his image as "The Blacker Baron".
- Which could explain why he's now the Blacker Baron, as he's possibly using "black" as a synonym for "cool", and the Blacker Baron is most definitely cooler than the regular Black Baron.
Leo works for the government only because his family shelled out the cash.
The whole reason the events of MadWorld taking place was because of Leo's family trying to recoup losses from their company, which may or may not include the virus that was released upon the entire city. Due to the biologically induced genocide upon a US city for the purpose of showing it off to possible international buyers, the government must have been gunning after Leo's family. Leo himself was killed by Jack, all that was left was his father as a fall guy.
Grieving over the death of his son along with the threat of being executed from treason, Leo's father decides to give his son's body to the government of an experimental cyborg program capable of reviving the recently dead in exchange for merely life imprisonment. Suffice to say, the experiment worked like a charm. However, since Jack also works for the government as a Chaser, the people behind the Leo's program wisely decided to wipe out all memories involving the events of MadWorld from Leo's mind. What they could not get rid of is an instinctual hatred for Jack, thus setting up the possible rivalry in Anarchy Reigns.