The item switch might actually be important! Sandbag and Peach can both pull capsules, and the contents of said capsule are dependent on the item switch.

That being said, should certain items be turned off? Perhaps non-food healing items and Starmans, since those can cause a bigger impact than other items (and are much less skill-based). Any opinions on this?

Items don't really have a place in comp play. Yes peach/sandbag get capsules, but the bigger risk if we turn the items on (besides the unpredictability/random element) is that it would allow for explosive capsules that actually are more dangerous than any item the capsules would create.

tl;dr items are silly so no, realistic reason is that they could create explosive capsules which would make the game a problem.

Hm... after testing more, if both items are off and no items are active in the item switch, capsules can either be empty or explode, with no other option. Explosive capsules will exist regardless, but I suppose this topic wasn't necessary since we'll just turn off all items. For some reason I thought that there was no way to make empty capsules.

to be fair I didn't know that you still got explosive capsules with items off, but that's good info to know for Peach/Sandbag lol.

We could turn off all items but one to remove the randomness.

Keeping only certain items activated is certainly a nice idea, but I think the main issue is going to determine which items should be legal and which shouldnt. Just allowing everything would be absurd (for example, that includes Smash Balls, Golden Hammer, Home-Run Bat, Laser Gun etc) for obvious reasons. Imo the favoured picks are to just ban everything (by far the most simple method), or maybe allow everything that Peach can already pull with her Down B. We are not entering new territory here - after all, that has been legal since 2001 - although certain items like the Bomb would need some serious discussion.

No other Smash game has capsules working this way tho. In official titles if the frequency is set to off then nothing comes out.

Nonwithstanding balance issues (what prevents fast characters from stalling for items?), why introduce randomness (in this case, random spawn locations) that can easily determine matches for no real benefit? Does anyone want to play a game where a tournament's worth of work can be obliterated because someone got a capsule exactly as you were recovering?

The topic was strictly referring to capsules spawned by Sandbag and Peach, since their item contents are determined by the Item Switch (even if items can't spawn any other way).

However, I was misinformed (I thought they would always contain items even if all items were disabled) since Item Switch affects different modes differently (Since they always contain items in Training, for example).

Oh sorry, I misunderstood what you meant. Yeah, Sandbag and Peach have their own quirks.