Yeah. If it weren't some Deadpool Multiverse nonsense it would look ridiculous. I love the 90s X-Men as much as the next guy, but trying to build a film franchise in the 21st century, the yellow would not fly. I can't wait to see this one.
I feel like there's been a fair bit of justification built up over the years that they could justify yellow costumes in an MCU X-Men.
Like, in Netflix's Daredevil, we see the cut-resistant yellow fabric created by Melvin Potter and eventually used in Kingpin and Daredevil's suits.
Then we see Daredevil cameo in She-Hulk, saying that he's picking up a new suit, and we see that a fair portion of it is yellow - though in fairness to your point, I think his yellow costume is pretty ugly and doesn't really fly. I'm excited to see how Deadpool 3 handles the yellow, and I hope that the MCU can find a way to justify the yellow somehow, even if it's a transitional costume or something equipped for a specific type of mission.