I feel he has the potential to be quite good and IS quite good but his frailty coupled with self-damage makes him quite hard to be effective with against competent players. He has everything a character could want. He has a teleport, tons of mixups, high damage output, fast burst buildup, an awesome wakeup counter attack (up A), good speed, good projectiles, and a strong combo game (the last two being enhanced by miracle eye). But because of that, he NEEDS something to keep him in check or he'll just obliterate the rest of the roster. 480 total HP with Miracle Eye doing a consistent -20 (Psywave-Vortex does -50), basic Y combo doing -40, and teleporting doing -20/40 HP really hurts a lot since he doesn't have HP to spare in the first place and naturally, he's going to get hit which further accentuates the dilemma.
Between him being unlocked last after doing the tedious Ferrum League, being a new character, being Linkin Park Mewtwo, and consistently hurting himself while having low HP to begin with, I can see why not many people play him. I personally love him and think he's great but I recognize that he is quite polarized and in some games, he'll go down in approximately 10 seconds. Recover helps mitigate the self-damage issue as it was intended to(I think it heals like 50-60 HP?) but even so, the only time you'll get to really use it is after a grab/phase change (holding it while doing so). This costs him positioning and slows down any momentum he may have had. Not to mention it can still be punishable. I like to use Cresselia with Synergy cheer. Some games, I can get Synergy burst twice within the same round which is nice considering how wide a range his burst attack extends.
I think he's a good example of a well-designed glass cannon character which means he's definitely not for someone trying to start out.
Edit: I neglected to mention that his Recover can indeed be held while moving around/shielding/grabbing/doing non A moves. It's cool and I need to play around with it more but holding the controller optimally for that is weird.