Thank you for bringing this to my attention, @
ItalianBaptist .
To respond to this as clearly as possible:
No they do not. It is easily verified.
Go make a Mii Fighter. Equip them with two high damage-increasing items plus an item that grants you something on spawn (like a Home Run Bat or so on). Now do the following battery of tests and you will see this is not true and there is no 'hypocrisy' involved!
Play them in training mode with Customs On. They will indeed gain equipment benefits. You'll spawn with a bat, do more damage than normal, etc. Take note of your damage values. If using Swordfighter, be careful because some of his moves have Sweetspot damage behavior.
Now repeat this test with Customs OFF. Notice your Mii Fighter does less damage despite supposedly having equipment. Notice they don't have a baseball bat.
"But the character select screen displays modified stats." - It is
wrong. The screen simply does not bother to tell you 'ignore this lol this stat spread only matters in Customs On.' It's a visual oversight.
"But that's training mode." - I'm getting to that.
Leave training mode. Go to Smash mode. Repeat the tests (Customs On and Customs Off) with your heavily equipment-using Mii.
You will get the
exact same results. Customs Off results in no spawned item, no damage increases. Customs On will give them Equipment benefits as you would expect.
Now go try it online in With Friends play modes. Same thing will happen.
EQUIPMENT DOES NOT FUNCTION IN ANY WAY, SHAPE, OR FORM BEYOND AN INCORRECT NOTICE ON THE SELECT SCREEN IF THE CUSTOMS OPTION IS SET TO OFF. GO TEST IT.
I thoroughly researched this before I wrote my open letter encouraging TOs and ladder hosts to reconsider their stances on Miis. I made sure to look at pretty much every realistic 'gotcha' about Mii design freedom. Equipment was going to be a huge snag, so I checked it at length just to make sure it was as safe as possible. Tournaments cannot be compromised by Equipment on a Mii Fighter if Customs is set to Off.
I apologize for this being a very in-detail, defensive post, but after a certain point this becomes rather frustrating and I want to be very, very clear in shooting down any misconceptions.