I can't really see that working since Pokémon can't revert to a prior stage.
Unless it involves the Devolution Spray from the Pokémon TCG. (Has Smash ever referenced the TCG?)
No, I don't think Smash has referenced the TCG.
As for the former, the evolution could be permanent for that round. It should take some effort-- like gaining a certain percent total off of all opponents-- to be able to evolve. I love the idea of a Pokemon evolving in mid battle, it'd look so neat.