A lot of people say The Lion Guard should’ve taken place after Simba’s Pride. I disagree, and say that its place in the timeline was a good decision (if not, the lesser of two evils).
There are a lot of reasons why that is (such as character bloat, audience alienation, ect.) but the one thing I’ll bring up is how both in-universe, and out-of-universe The Lion Guard is meant to represent the next generation after The Lion King.
In-universe, it features the generation after Simba and Nala’s, involving Kion and his Lion Guard + Kiara, Tiifu, and Zuri. Janja’s clan of hyenas are the next generation of hyenas following Shenzi’s clan (regardless of whether or not you take the promos referring to them as “descendants” to be canon). The main conflict of the pilot is how Kion breaks the traditional molds set in by previous generations, and ultimately proves a mouthpiece of said generation (Simba) to be in the wrong.
In a meta-sense, The Lion Guard is aimed towards the next generation of children whose parents were likely around for the original film's release and manages to appeal to them through things like morals, or music, which is a big reason the show took off in the way it did. The in-universe instances of “the next gen.” are done to gravitate towards this newer, younger audience.
Where am I going with this? Well, the reason this is done as well as it is, is because the show is strictly anchored only after the first film, meaning there is as much of a seamless transition to showcase this. You lose a LOT of that by having the show placed after TLK 2 because there’s yet ANOTHER generation in-universe (Kiara, Kovu, Nuka, Vitani), that was skipped over. And it would undercut those themes entirely, not to mention confuse the young audiences at home who have likely never watched TLK 2 (because remember, beyond the online fandom, this movie, along with many other of Disney’s straight-to-video sequels are VERRRY unpopular). It would’ve felt too much like a Lion King 2 spin-off instead of a Lion King spin-off.
This isn’t say there are no inconsistencies between TLG and TLK 2, or that the show's narrative isn't at all hurt or hindered by taking place in between the second movie, but it’s the lesser of two evils.