Honestly, I don't know about all the KH3 craziness that Xehanort can do there and I seriously respect
@Juviii 's campaign, so I'll provide a legitimate explanation on why I think Xehanort wins this match-up despite being such a meme.
In large part, it comes down to what Sky touched *upon:
Goku is a very intelligent fighter and Ultra Instinct exemplifies and amplifies Goku's sort of intelligence.
However, he's up against an opponent, Xehanort, that without a doubt is a less talented fighter but is generally very intelligent and can prey upon Goku's character flaws (general stupidity, arrogance, and carelessness) as well as one particular inherent flaw with most of Goku's power, reliance on negative emotion (anger to be specific).
In fact, not only has Xehanort done this before, but he's also done this multiple times before and has done so to such great effect to a person with similar flaws as Goku, Terra, that he was able to take possession of that victim's body which gave Xehanort his more iconic appearances, bind up the bodies form soul, and use that to aid him in battle too.
Terra powering himself up using anger, very much like going super saiyan in Dragon Ball.
The result:
Xehanort taking over his body.
What became of the victim's soul:
Even after the body and soul(s) were forcibly made separate, (something that could be among the techniques Vegeta is on the path to mastering), both the body and the soul that was actually freed remained subjugated to Xehanort and primarily retained his essence after losing his memories
It is also worth noting that the victim's soul was so effectively taken over that the multiple versions of Xehanort, even the divided heart and body, could still summon and use the victim's soul to fight for him.
All that being said, I don't think any of this would be relevant if Goku stayed in his base, god ki, or UI forms... Even without any transformations and based off of what I know of Xehanort's immense power pre-KH3... it wouldn't even be a battle. Not even kind of, the power level is so great that I think the toughest part of the battle would be getting Goku to even take Xehanort seriously enough to even lift a finger and when he does Nort-y would be done. Annihilated. Could literally be wiped from existence.
All Goku would have to do is not try to transform into a super saiyan... that's all. Just don't transform or give into Xehanort provocations. Could easily beat him as long as he doesn-
But that was a special case. He had to transform to have chance at beating Buu. If Goku was up against a much weaker opponent, then surely he wou-
Literally feeds the guy after the slightest provocation. In fact, he feeds him to death.
In a world like Dragon Ball's with fights that are typically more physical than mental, Goku is on the level of the gods, but against an opponent that exploits the heart and mind, Goku is putty in his hands. Very dangerous, explosive, and loud putty, but putty none the less.
Votekill Kakka carrot cake