Honestly as someone who never played the game or had much interest in it I heard this theory repeated as fact so many times by different people that I thought it was an actual plot point in the game, so this topic is kinda eye opening.
It took root because if you just played the game by its lonesome without any other knowledge or context you probably would come away thinking Rinoa is Ultimecia.
- Rinoa and Squall's big romantic moment on the Ragnarok has Rinoa state she wants to keep this moment in place forever, the literal definition of Time Compression.
- Ultimecia uses Griever as a Guardian Force in the final battle and there is an actual explanation for this: She created it on the spot by drawing from Squall's mind his ultimate expression of power but that's not clearly stated in the English version so it's extremely easy to assume that Griever is tied to Ultimecia because she's Rinoa, since Squall and Rinoa had that little scene together at the battle of the Gardens where Squall explains the symbolism of Griever (his necklace). I think, not entirely sure, that if you rename Griever to something else then the Griever boss fight will also have a different name.
- The ending sequence, where Squall's memories are stripped away as he's lost in Time Compression (again, something not clearly stated in the English version) features some juxtaposition of Rinoa and Ultimecia at one point and has lots of surreal nightmarish imagery surrounding Rinoa (because in this scene Squall is losing his memories of her).
- Ultimecia's Castle floats above the flower field at Edea's Orphanage in the far future where Ultimecia resides, and this flower field is where Rinoa and Squall promised to reunite (and indeed do in the ending when Rinoa saves Squall from Time Compression).
- Rinoa and Ultimecia are both Sorceresses and while the game never outright states they are immortal their lifespans are kind of up to interpretation. Adel was locked away in cryo sleep and shot into space and she was still completely conscious and broadcasting her thoughts so hard she scrambled radio communication across the entire planet (this is seen in Timber; the creepy red text on the outdoor TV is Adel demanding to be brought back), Rinoa becomes a Sorceress so they also elect for the cryo sleep treatment, and in the ending Edea makes a remark about the dying Ultimecia that she can't truly die until she passes her powers on to another person.
- Tying into the above there's a lot of theming around the Sorceress and her knight. Seifer leaps at the opportunity (with maybe some brainwashing) to be Ultimecia's protector because his dream is to be a knight to a Sorceress, and Squall promises to Rinoa that even if the entire world turns on her for being a Sorceress, he will always be her knight. From here, because of all the above, the theory goes that Squall passes away at some point and Rinoa is still alive and still being persecuted for being a Sorceress and will herself never die, so she eventually becomes the feared Sorceress.
- Something I just came up with now writing this out is that since Time Compression does cause memory loss, you could then easily explain that Ultimecia's study of it to enact her spell came at the cost of her memories of Squall and that's why she has nothing to say when they finally meet face to face at the end.
