I personally see the HMS as a very interesting and complex character. I'd like to see him again but then his mystery is actually something I like preserved. Your theory is very good but it's not what I believe. I think he's much more multi-faceted than just being the reincarnated spirit of evil. The man seems to set up his shop just after Link starts his quest in
OoT. Now if we were just to play Ocarina of Time he is a fairly unremarkable character to be honest. The fact that he just sets up shop at the same time as Link steps out of the Kokiri Forest is quite feasibly a coincidence. None of his masks are particularly special except the Mask of Truth. How the hell did he get his hands on that? Considering other Sheikah artifacts are hidden away and hard to find, it seems peculiar that he would have that mask.
But anyway, I digress. The other masks are all basically normal, unmagical masks. However, some of those masks are most important masks in Majora's Mask, especially the Goron and Zora one and the HMS supposedly would have no foreknowledge of those masks. Again, a coincidence that he has those masks in his possession but also indicative of foreknowledge.
Coupled with his continued strangeness in
MM. He is following Link-and despite saying he is following him to save him, Link entered the rabbit hole as a Hylian. With all the pits and strange rooms and locked doors on the route to Termina the HMS must have followed him that way when Link was still a human-which to me says that he knew what was about to happen. Also, it's another crazy coincidence that the HMS just so happened to be in that part of the forest at that exact time. Plausible, but peculiar. He also clearly possesses strong magic and wisdom beyond what you'd expect of a standard merchant; his knowledge of the song of healing, being able to whisk up an organ out of no where. He is also remarkably brave, considering he is prepared to fall down a great hole to help a boy he knows little about. This would suggest then that he is fully aware of who Link is, suggesting foreknowledge again. Moreover, he manages to disappear suddenly too, as if into thin air. He's certainly not normal.
Moreover, his disappointment at the loss of Majora within the mask would suggest that he potentially saw it as an equal for him. He is the only other thing there if you let the moon fall down, which suggests some supernatural involvement. The children of the moon also seem very similar to him. This would suggest then, that the HMS could be some sort of deity.
Now bear with me a second. It's a big leap, I know, but hopefully the evidence above proves the HMS is a man who appears almost to watch over Link, or at least maintain a presence there. He doesn't actively help like Kaebora Gaebora. But he is there whilst you are a child, and whilst not present til the end as an adult, who's to say he isn't there but in a different guise? He seems to have more knowledge of what is to come than one should expect, and he seems to have wider powers than the average magic man.
It has been implied also, that there are other Gods than Hylia, Din, Nayru and Farore. The Fierce Deity for example, and the Goddess of Time. In
SS, they are referred to as the Ancient Ones, not the Golden Goddesses, which could suggest that there were more than just those four. Polytheism typically includes male Gods as well as female ones. Also-what is the HMS the god of, I hear you cry. Say, just for academic purposes, we align Hylia-Venus, Din-Juno, Nayru-Minerva, Farore-Diana and Fierce Deity-Mars.(I'm not suggesting that they are inspired/based on these, just showing how another polytheistic religion designates their deities) the HMS could fit under an Apollo-like god, highly complex, undefinable and an absolute s**t. An absolute limb and a half, but if the HMS was a god, then he could be similar. He doesn't have to be the God of Time or whatever. He could just be a deity. That's my personal opinion.
Well this ended up being far too long and much more windy than it was intended. Please dissect viciously at your own pleasure as it was written late at night and I'm incredibly tired...