Samo, you agree with Mewtwo being able to float?
I guess; the stadium 1 mewtwo screen definitely shows him levitating and his melee moveset further supports this. Psychic pokemon such as gardevoir are also shown and known to be able to leviate (without possessing leviate ability), as is the Abra family when they get hit on stadium and then (humorously), leviate back.
Justaway12, there's a difference between Samus' equipment and Bowser's items. Items are stuff you can usually carry with you, like objects, "A distinct physical object", while Samus Power Suit nor it's weaponry cannot be classified under items. It's like comparing a Car to Car Keys. Star Rod is an item on melee and Kirby games too and was certainly an item Bowser was able to steal. <_<
Basically embargo disables the use of held items and items trainer uses on their pokemon. Trainer can still use items that do not affect his own pokemon, such as pokeballs, but he or his pokemon cannot use any items, like berries, plates, stat enhancing items, in-battle effect items, evolution, incence, ev-enchancing, mail, scarves...
Can't Bowser's magic be dodged? >_>
I kinda doubt Bowser could just point his pinky in Mewtwo's direction in a flash and Mewtwo would turn into tumbleweed in the next millisecond. Bowser always seems to exaggerate his movements somehow or his magics just take a while, not to mention he's cocky and kinda limited when it comes to speed and mobility cause he's so big and uh, turtle. Heck, even Mario can dodge his stuff. Mewtwo, as a psychic, only needs to think to be able to do his moves.