Super cool proof-of-concept! Easy to understand, I got the hang of it real quick. One way you could solve the issue of what happens when the pause occurs while you're in the air is to add aerial moves that are only available in that situation. As someone who plays a lot of Smash Bros, one potential issue I could foresee would be that you would need a very large library of possible moves, or else the game would become easy to predict, and two skilled players would just be able to play perfectly, resulting in either a draw, or one player winning as a result of the turn order. Maybe moves could sometimes be cancelable, to add variety and reduce predictability.