After leveling my Samus Amiibo to level 50 (twice) and getting some hands on experience in both training and feeding, I think I am qualified to answer this question. So, to begin, when you "feed" it equipment, the item is destroyed forever. If it had an effect, it will be "absorbed" and the character will keep it. Up to 3 effects can be "absorbed", and attempting to add a 4th will allow you to choose which one is deleted (including the new 4th). The Amiibo can hold a total +120 stat increase. Negative stats will allow you increase another higher, up to the usual cap of 200 for any one stat. If 1 or 2 blue effects (positive effects) are used, this cap will be reduced, any red effects (negative effects) will increase the cap, and having 3 blue effects will bring it back to neutral. As you approach the total of +120 points allocated, the effectiveness of feeding will diminish. However, you will be left with a 1:1 permanent ratio for any equipment you feed it. While the game may display that it will change from the 1:1 ration in some cases, this is just because the game does not take effects into calculation until one is chosen for deletion.
As a note, an Amiibo will receive less damage, deal more damage, move faster, jump higher, and be launched less than a normal player of the exact same stats and effects. Assuming the Amiibo is at least level 30. This, combined with the fact that Amiibos will ALWAYS have their stats and effects on (regardless of whether or not custom parts are enabled), makes an Amiibo particularly dangerous in any scenario. Without even mentioning they can have stat combination impossible for player builds to achieve. Such as +200 atk, --40 def, -40 spd, along with any 3 blue effects.
I hope my reply was informative and not simply a repeat of your own experience in trying to discover the information for yourself.
