Just so we're clear, I didn't make Isle of Rebirth. I simply uploaded it to this site because I loved it and it deserves to be kept alive. It's current official repository is going to die pretty soon and I just didn't want to see Isle of Rebirth die with it. Yes, there are items from the modern era of Zelda in there too - you'll see.
You're correct with the bomb strategy, but wrong in the execution. To ensure you go into boss fights with a full loadout, you want to save the game before fighting the boss and reload the game if you don't kill the boss (quit without saving). Only if you beat the boss do you save the game (save and quit). Are you playing on hero mode by the way?
To ensure that you save the game properly, press f6 and then choose save and quit. Then you can close the program by pressing escape and quit in the file menu. I've never heard of this bomb bag bug. Make sure you're saving correctly. If you're still having trouble, can you make a video and show me exactly what you're doing and what's going wrong?