Tom Cruise's Iron Man appearing as part of Doctor Strange in the Multiverse of Madness' Illuminati would have been a great tribute to Robert Downey Jr.'s version of the hero. Doctor Strange in the Multiverse of Madness introduced the franchise's live-action version of the Marvel Comics secret superhero team, but with a slightly altered lineup. One of the changes in Doctor Strange 2's Illuminati is the glaring absence of Iron Man, who is one of the original members of the team in the comics.
The Illuminati are meant to represent the best of the best of the Marvel universe, with each member representing a major demographic in the superhero community in order to make important decisions about the fate of the galaxy. Doctor Strange in the Multiverse of Madness' team is composed of Captain Carter (Hayley Atwell), Mordo (Chiwetel Ejiofor), and Maria Rambeau's Captain Marvel (Lashana Lynch), with Black Bolt (Anson Mount), Mister Fantastic (John Krasinski), and Professor X (Patrick Stewart). Prior to the Sam Raimi-directed film's release, however, there were rumors that Tom Cruise would cameo as an Iron Man variant, which clearly didn't pan out.
Understandably, Marvel Studios is very careful in terms of handling Iron Man’s legacy following the Infinity Saga. Downey did a magnificent job in the role and there are a lot of risks that come with the idea of seeing another actor playing the character, even if it's a variant and not Earth-616's Tony Stark. That said, Cruise playing Earth-838's Iron Man would have actually highlighted just how great Downey was in the role. Considering how bad MCU's first take on the Illuminati was, Cruise's Iron Man would presumably have been killed right away the same way his teammates were in Doctor Strange in the Multiverse of Madness. This would have inadvertently underscored the idea that the Sacred Timeline's version of the character is secretly the best, as there's no way that Downey's Stark would have let Scarlet Witch go on a dangerous rampage like that.
It’s worth noting that Iron Man and Scarlet Witch's MCU relationship was tumultuous. For years, Wanda Maximoff blamed Tony Stark for the death of her parents after a Stark Industries bomb went off in their Sokovian home, claiming their lives. They eventually became allies on the heels of Avengers: Age of Ultron, until Earth's Mightiest Heroes broke up in Captain America: Civil War. Throughout this whole ordeal, Tony demonstrated several times that he understood how Wanda can be dangerous, even if she didn't mean to be, because she doesn't have full control over her powers. He didn't have any personal grudge against her, he just understood her situation and the difficulties she was dealing with because she still didn't completely understand her own capabilities. With Cruise's Iron Man from Earth-838 not having this specific history with Scarlet Witch, he wouldn't have the foresight, like the rest of his fellow Illuminati members, as to how to handle Wanda's attack.
Sadly, Marvel Studios' hands-off approach to Iron Man's legacy in MCU Phase 4 is doing the character more harm than good. Stark Industries' non-involvement in some of the universe's biggest events since his passing in Avengers: Endgame is damaging his image, specifically during Peter Parker's (Tom Holland) whole Spider-Man: No Way Home snafu. Cruise's Iron Man being in Doctor Strange in the Multiverse of Madness would have been a creative reminder of how great Downey's version of the character was in the franchise, especially considering how disappointing and widely incompetent the rest of Earth-838's Illuminati was.
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