It's apparently not permanent, and is instead linked to what button input you use to get off the bike. Using the jump button will remove the grounded flag. Using the special button won't.
In any case, the glitch seems pretty beneficial for the most part, since it prevents you being meteor smashed by Falco and Ryu, along with the aforementioned Falcon up tilt. The downsides are getting meteor smashed by Samus and being vulnerable to DK's down B while airborne.
Yeah, I figured that out after more labbing and I've been trying to spread the word. Basically, wario is in control of whether he wants the aerial flag or ground flag when he is in the air. This is pretty beneficial in some matchups like the Palutena one.
Character guide for wario:
Vs. Captain:
Always choose grounded, you avoid utilt spikes and sideb spikes
Vs. DDD:
Always choose grounded, Dair and Upb will not spike. You will be able to be hit by the shockwave box on fsmash but that's just 6%.
Vs. Diddy:
Bassically irrelevant, grounded is very slightly better, you'll get a more escapable angle on the early hit of usmash.
Vs. DK:
Always choose aerial. DK headbutt becomes a spike vs. grounded. DK downb can hit you in the air if you choose grounded. Kong cyclone windboxes will push you up instead of down.
Vs. DHD:
Choose grounded, dair won't spike.
Vs. Falco
Choose grounded, messes up utilt and usmash linking a little bit. Doesn't protect you from dair. Does protect you from Falco Phantasm spike.
Vs. Fox:
Choose grounded messes up utilt and fair autolinking.
Vs. G&W
Choose aerial. Dtilt will send you at a low angle and become a very good edge guard tool if you choose grounded.
Vs. Ganon
Choose arial. Doesn't matter much, but if you choose grounded you'll be able to be hit by dair landing shockwave while you are in the air.
Vs. Greninja
Choose grounded. Prevents substitute spikes.
Vs. Ike
No obvious choice. Grounded makes you immune to aether spikes but makes you now vulnerable to eruption spikes. Grounded makes you vulnerable to a usmash shockwave hitbox.
Vs. Kirby
Not much here. Doesn't really matter.
Vs. Bowser (Koopa)
Choose aerial. Grounded will make you vulnerable to shockwave hitboxes on some moves. No advantage to grounded.
Vs. Bowser Jr. (Koopa Jr.)
Choose grounded. Messes up Usmash and dair autolinking. Makes you vulnerable to some landing shockwave hitboxes.
Vs. Link
Completely irrelevant.
Vs. Little Mac
Choose aerial, grounded makes you vulnerable to usmash sweet spot while airborne and some KO punch windboxes.
Vs. Charizard (Lizardon)
Basically doesn't matter. Grounded makes you vulnerable to usmash 1 frame earlier (6 instead of 7). For customs, it protects you from the spike on "sinking skull".
Vs. Lucario
Irrelevant.
Vs. Lucina/Marth
Choose grounded, let's you take the 3% sour spot of usmash while in the air which is highest in the stack so if it hits your hurtbox it will take priority over the sweet spot.
Vs. Luigi
Choose grounded, protects you from dair spike.
Vs. Mario
Irrelevant
Vs. Dr. Mario
Choose grounded, messes up dair autolink
Vs. Metaknight
Choose grounded, messes up fair, bair, sideb, downb, KB angles and linking
Vs. Mii Brawler
Choose grounded, protects from dair spike, headache maker spike, head on assault spike (and some other hitboxes on that move). Makes you take the weak hitbox of feint jump kick. Messes up autolinking on onslaught, piston punch, foot flurry.
Vs. Mii Gunner
Choose grounded. Messes up autolinking on uair. Protects from dair spike and canon uppercut spike. Disadvantage: reflector will be a semi spike off stage.
Vs. Mii Swordsman
Choose grounded, messes up autolinking on skyward dash. Disadvantages: makes you vulnerable to shockwave hitbox landing of powerthrust, makes tornado shot gimp you better with the offstage wind box.
Vs. Villager
Hard to say, makes you vulnerable to some weak hitboxes while in the air on dtilt and usmash. Makes dsmash weak against you in the air. Not much difference either way.
Vs. Ness
Choose grounded, messes up dash attack just a little bit.
Vs. Pacman
Choose aerial, grounded makes you vulnerable to the first hitbox of dash attack.
Vs. Palutena
Choose grounded, messes up uair, nair autolinking. Protects from dair spike. Disadvantage, dtilt is stronger against Wario in the air.
Vs. Peach
Choose aerial. If grounded dtilt becomes meteor.
Vs. Pikachu
Choose aerial, some moves are a bit stronger vs. grounded.
Vs. Pikmin and Olimar or Alph
Choose grounded, makes final hit of utilt always miss, protects from dair spike.
Vs. Pit/Dark Pit
Choose grounded, messes up usmash and fsmash linking.
Vs. Jigglypuff (Purin)
Irrelevant
Vs. Robin
Choose grounded, protects from dair spike. Disadvantage, dsmash sweet spot can hit you in the air. Messes up Arcthunder autolinking a bit.
Vs. ROB
Choose grounded protects from dair spike. Disadvantage: makes it so usmash can pop you up with the weak hit that links into the strong hit while you are in the air.
Vs. Megaman (Rockman)
Choose grounded, messes up bair autollinking, protects from dair spike.
Vs. Rosalina and Luma
Choose aerial. Grounded makes you vulnerable to strong hit of luma utilt.
Vs. Samus
Choose aerial. Utilt becomes a meteor if you choose grounded. Grounded will mess up screw attack autolinking boxes a bit, but it's not worth it.
Vs. Sheik
Choose grounded, messes up uair linking.
Vs. Shulk
Choose aerial, not much difference but dsmash is stronger vs. grounded.
Vs. Sonic
Choose grounded, protects from dair spike.
Vs. Zero Suit Samus
Choose grounded. Messes up dsmash knockback and damage. Protects from dair spike and flip kick spike or footstool, however, makes the hit stronger.
Vs. Toon Link
Choose aerial. Grounded makes dsmash potentially link, and makes you vulnerable to shockwave hitbox on dair.
Vs. Wario
Choose grounded, messes up dair linking. However, makes bike hit you harder.
Vs. WFT
Choose grounded, protects from dair spike.
Vs. Yoshi
Choose grounded, messes up bair linking
Vs. Zelda
Choose aerial. Basically no difference but there are additional grounded only boxes with the same damage and knockback as other boxes.
The rest of the dumps (Ryu, Roy, Lucas, Mewtwo) are a bit too difficult to easily pull the information out of.
