MK could... try to catch a banana before he lands. The time frame you are completely vulnerable in the air, unable to catch a banana while landing, is extremely small. Honestly, that window might be non existent depending on how far Diddy's Banana can travel per frame, and how big of a "item grab range" the character has.
Now, it might be hard for the MK player to react quick enough, but at the same time Banana toss is fairly slow (much slower than people reported it as). If Diddy is in his shield with a banana in his hand, seeing his shield drop gives you a hint that you probably need to press Z sometime soon.
I also think that overall, MK can outgay Diddy harder than Diddy can outgay MK. Diddy's tools to "play gay" against people are projectiles. Dynamic projectiles, however, that can be used against him. There's little you can do to make what MK does work against him. Platform camping on Smashville, Gliding under stages, Scrooging, Planking, etc. Sure, you can try to work around these things, but you cannot grab his sword and hold onto it/throw it back at him/neutralize the threat.
As for playing gay, I used those comparisons to explain how the matchup looks differently based on what the MK is allowed to do. If he is allowed to plank non stop/no quarrels at all, then it's obvious Diddy doesn't win. You would be hard pressed to argue for a character beating MK when he's allowed to go M2K on Meep/Gnes playing gay status full blown. Not Snake, Not Diddy, not anyone. If even 1-2 of those other characters could beat MK with planking/all sorts of gay stuff allowed fully, then there would be no need to ban planking, which I see that a lot of people who think Diddy/Snake/etc beat MK also want planking banned (Prime example: Inui. I don't know how Pierce feels about planking). If planking were to be banned/heavily limited, then it's obvious that MK would not win in certain matchups, at least not as hard as he can/does now.
However, let's say that MK is the best, and we decide to ban planking. All of a sudden, IC's/Snake/Diddy beat him. He is removed from the #1 spot because of this.
At this point, you would have to analyze whether we went too far with our rule against planking. Our goal is to remove things that are just downright nasty. When achieving that goal however, we don't want to make a character suddenly drop spots because of it.
I'll just go on a train of thought here: If you want planking banned, then you also have to believe MK is the best character in the game. If you think planking needs to be banned, while MK is the second-3rd best in the game, then you are basically saying that you believe that the second best character has a game breaking tactic, and that the best character is SO good that they are even more broken than that game breaking tactic (otherwise, they would lose to it correct?). So if you think planking needs to go, but that MK isn't even the best in the game with it allowed, then your stance should also reflect that you want the character above him completely removed from the game. Otherwise, you just look like a huge hypocrite wanting something for the second best character to be removed, with the best character being untouched. This means you cannot argue that Snake/Diddy is the best character in the game, while also wanting planking to be banned/limited/removed.
Furthermore, if people truly believe that there is a character above MK, why haven't we thought about discussing whether this character needs to be banned or not? MK has gone through countless ban discussions throughout the lifespan of Brawl. If, this late after the game has been introduced, we really think someone is better than that, why hasn't that character come under fire?
Snake has, by a few people, even though it's kinda obvious he isn't the best character in the game, and that he has enough bad or "trouble" matchups to keep his matchup spread down.
Falco, while being really good, clearly isn't the best with planking allowed, and with people allowed to play as gay as possible against him.
Diddy, also while being really good, is kinda like Snake. He has a lot of bad or trouble matchups, certainly more than MK at least.
IC's... don't even get me started with how CP stages alone warrant that they are not the best in the game.
I think the character with the best case for being the best is MK. His "supposed" bad matchups aren't even validated. Peach being trouble for Diddy... well just look at Kosmos vs x Diddy player countless times lol. Like there's a lot more evidence out there that characters can be trouble for Snake/Diddy/some character, than for MK.