Another Mario main here, I'll make some bullet points. Let's start with what Diddy has to watch out for:
- Watch the hell out for his Smashes. If Diddy doesn't AC stuff like F-air and Monkey Flip he will be eating one for sure.
- Diddy is pretty easy for Mario to combo since he doesn't really have any reliable combo breakers so avoid grabs obviously.
- Fireball wrecks Diddy's U-special if he isn't careful. Just try to recover out of range of them.
- Mario doesn't have any super consistent ways of getting Banana but if he does... LOL. Seriously, letting him get it is really bad since he can then confirm into pretty much anything if he hits with it.
- When Diddy actually dose lose neutral to Mario, it can suck for him because Mario is good at keeping him offstage. Be wary of getting 2-framed by D-tilt and B-aired.
You just really have to be careful of Mario's combo game because Diddy is sort of perfect for it, to be honest. Another thing is that Mario has some kill options that can catch you off guard. Namely B-air which will kill around, like 130% and even earlier with rage. Also, like they said in the Beefy vid, D-throw to F-air can really murder you if you aren't on the lookout for it around 80% - 120% or so depending on rage.
Now for some things Mario has to watch out for that Diddy has:
- F-air since it's disjointed and can keep Mario out.
- Banana is just as annoying for Mario as it is for any character without any reliable way of destroying it (no, Fireball is not reliable for that).
- Mario is also quite perfect for Diddy's combos the same way Diddy is for his.
- While Diddy can't dropzone Mario, he has some scary edge-guarding tools that Mario must respect (F-air, B-air, thrown Banana, etc).
- Diddy definitely has the stronger neutral and that's just something Mario has to accept.
Diddy is good at comboing Mario and hitting him with Banana so that helps a lot. I think where he shines is simply keeping Mario out with his disjoints and good item game as well as racking up damage despite his low overall damage output. The thing is, he definitely nets kills a lot later than Mario percent-wise but Banana confirms are super useful so it kind of balances out.
In my opinion, the MU is 50:50 because both characters can easily abuse the others' weaknesses and both are easy for the other to combo. They also can exploit each others' recoveries quite well. I think it's one of those MUs that is determined by which player outplays the other in that particular game/set.
This is pretty much what I know from my experience with the MU so far. Hope this helps!