UP/DOWN + UP/DOWN (i.e. Lion and Mario Bros.)
...seems pretty clear. It's asking you to only utilise up and down as the movement similar to the two games given as exemplars.
For further clarification, yes, that would mean two "characters", similar to the two games given as exemplars.
One way to show that some great games can come from this limitation, would be to make them. I was hoping to inspire that in others, as I was inspired to do the same. But I'm not convinced that jam attendees feel they can do this with the given constraint. I'm also not convinced the given constraint is being given a fair chance.
There are some other LCD jams as well as G&W specific ones, so I don't mind shutting this one down. I don't get the sense there's a real supportive spirit for it here as laid out.