Could be. Rumor has it NEC had strict guidelines regarding what sort of games could get released on the FX. Now I'm not sure what their stance was on traditional fighters, but if they put the botch on this one, it could be that HuneX already had resources invested and decided to release it as-is as a "hidden unlockable" in First Kiss to get by the NEC content police.
An alternate theory could be that they were planning HuneX Fighters '98 as a regular release, approved by NEC, but when the console's end-of-life was announced in 1998 they decided rather than waste resources and money finishing it they released it as-is as part of First Kiss (which ended up being the last release for the PC-FX).
Either way, it seems unlikely that it was developed solely for inclusion in First Kiss. It seems probable that it was some sort of separate project that ended up being incorporated into FK for some reason.