Custom 2-D fighting Super Smash Bros like Camera working except for one small part?

Hey SpyGuyTBM!

So, at the moment, your code isn't at all taking into account your players' position on the Z, which is why it's not being pushed back if your character walks toward your camera. In order to fix this, you simply have to find the character who's torso is nearest to your camera, and then zoom back by however many studs you like from their position, like so:

local X = {}
local Y = {}
local Z = {}

local cam = workspace.CurrentCamera
cam.CameraType = "Scriptable"
wait(5)

while true do
	wait(0.1)
	for _,plr in pairs(game.Players:GetPlayers()) do
		table.insert(X, plr.Character.Torso.CFrame.X)
		table.insert(Y, plr.Character.Torso.CFrame.Y)
		table.insert(Z, cam.CoordinateFrame.Z-plr.Character.Torso.CFrame.Z)
	end
	
	table.sort(X)
	table.sort(Y)
	table.sort(Z)
	
	local lowest_z = Z[1]
	
	local Xlow = X[1]
	local Xhigh = X[#X]
	
	local Xcam = (Xlow + Xhigh)/2
	
	
	local Ylow = Y[1]
	local Yhigh = Y[#X]
	
	local Ycam = (Ylow + Yhigh)/2
	
	
	local Xleng = Xhigh - Xlow
	
	local NewXleng = Xleng/2
	
	local Zcam = 1.42814801*NewXleng
	
	local num_z = (cam.CoordinateFrame.Z-lowest_z)+20;
	cam:Interpolate(CFrame.new(Xcam,Ycam,Zcam + num_z), CFrame.new(Xcam,Ycam,5), 0.1)
	
	X = {}
	Y = {}
	Z = {}
end

[I made the minimum distance from the camera 20, to make the zoom a bit more clear]

In the end, though, this effect is a little bit wonky (since players can basically minify other players by walking forward), so I'd recommend making borders both in front and behind the players on the Z, so that they can't walk too far in those directions. That'll give you a bit more of a Smash-like vibe.

Hope that helps! =)

P.S. For future reference, tab your code properly, readability is extremely important so that both other programmers and you yourself have an easy time understanding it later on =P