Something to consider about
that could hold him back from being the best character in the long run: When not holding a banana, Diddy doesn't have any really good burst punish options against grounded opponents if he finds an opening in the neutral and wants to capitalize. Think about all the other top tiers and why they dominate neutral.
finds an opening and she can run up fair, which, when combining her mobility with fair's frame data and follow up potential, is insane. She can also fastfall fair or nair after a short hop if she really needs to hit low profile or grounded opponents, but rising fair's frame data and hitbox are safe enough that it's a good burst option anyway.
finds an opening and he can abuse his frame 4 dash attack and all the ridiculous followups that come with it.
obviously has jump cancelled run-up witch twist which doesn't put her into free fall, can be done out of a dash, and leads to massive rewards most of the time.
Even
, who's neutral isn't as offense based as some other top tiers, can perform his excellent dancing blade out of a dash, and his rising fair has a good hitbox and frame data for burst punishes as well.
Now on paper, Diddy Kong should be able to hold his own against these characters with his offensive approaches and punishes out of a dash. His ground speed is excellent, he has good rising aerials in Fair and Bair, and when coupled with arguably one of the best grounded pokes in dtilt, his offensive punish capabilities should be godlike. Unfortunately on closer inspection, these moves have some issues. As Zinoto points out in his Cram School video, Diddy's fair is actually a lot less safe on shield than people think it to be, and its hitbox is actually really bad at hitting some shorter grounded opponents. When coupled with the fact that a fast fall forward air has lots of endlag, it means that Fair is not actually that great as an offensive approach on the ground, despite its solid defensive capability for stuffing out approaches and winning the horizontal aerial disjoint game. Rising bair is also mediocre against grounded, non-tall opponents. Down tilt is a great move but by nature of being a tilt cannot be done out of a dash, so its utility as a burst punish is limited (even with Diddy's amazing fox trot).
Granted, Diddy can compound this with the banana, as the banana can be jump cancelled out of a dash and has exceptional frame data, but possessing the banana makes Diddy a very different character and has its own set of limitations.
These observations have honestly kind of turned me off of the character as of recent. Diddy is stupid levels of fun at a certain level of play because bad players jump way too much, play too aggressively and succumb to Fair, Dtilt and banana shenanigans. At higher levels, Diddy gets away with way less Fair spam and general cheese, and you're left with a character that has to play more defensively in higher level matchups because he can't always get in and capitalize on a punish when he needs to. His option select is just really weird in general.