Yes, it confused things a bit but Lucas wanted it to be a Saturday Morning serial. The one place he lost against the studio was starting the crawl with “Episode IV - A New Hope.”
The studio thought it would be confusing (and they might have been right).
So what is the betting? Prequel or sequel? According to Lucas’ standards, it would be the sequel — that is the next in the series.
In the books, after the last movie (SWVI), Luke was the last Jedi standing and Leia and Han Solo get married. Their kids turn out to be Jedi kids and, as the last Jedi, Luke sets out to teach them the ways of the force and to reform the Jedi order.
Given the ages of the original actors, continuing the saga from how it ended in Episode 6 might work to use them to introduce the new characters. Lots of possibilities.