I think Hal and I both have expressed some concern about it.
I know early on there was a lot of speculation regarding who Matt Smith was/is going to play, because it seemed he was in the movie, then he wasn’t. He still might be, but maybe it is still heavily guarded.
I know there were rumors that he might’ve played a young, rejuvenated Palpatine. I don’t think I’m the only one that has had this theory, but I think it is possible that in an earlier version of the film, Matt Smith played a Sith acolyte that allowed the spirit of Palpatine to possess him, and this would’ve been the person Rey and Kylo would’ve fought in the climax of the film. Maybe we would’ve seen McDiarmid briefly, but only as a spirit that was attached to some kind of object or phylactery, possibly Vader’s helmet. But after the warm reception McDiarmid received at Celebration, they might’ve have changed that to give Ian more screen time, and thus now he appears physically throughout the whole film without a satisfying explanation for those of us who care to know how.
This might be a stretch, but I don’t think it is impossible either. Alternatively, maybe Palpatine was only in physical form, and Matt Smith just played his rejuvenated self, but that was changed in reshoots for the reasons stated above.
I would have preferred the Sith spirit angle, because at least that makes some sense. Hell, at this point I wouldn’t be too upset if they went full-on Dark Empire and said it was a clone vessel. I just don’t understand how Palpatine could have physically survived being thrown down a reactor shaft and then the Death Star’s destruction.
Another possibility (that I’m 90% sure wouldn’t be explained in the film itself) could be that Palpatine was somehow saved by someone who was able to pull him into the World Between Worlds that Rebels introduced. Ahsoka was saved by Ezra in a similar manner, so it’s possible the same thing happened to Palpatine, and since then he has been in hiding in the Unknown Regions, becoming older and weaker, but biding his time for the right moment to return. It feels pretty convoluted to me, but to not even give a semblance of an explanation in the film would be pretty head-scratching to me.