This was actually quite a fun game to play. It reminded me of N64 Super Smash Bros.
I played with both controller and keyboard / mouse and the characters movement were a little glitchy, but the attacks worked fine. The power up attack was really cool to see implemented as well.
Great idea to use the Unity capsules for the characters.
On a side note, I noticed when connecting Player 2 that the horizontal inputs are inverted which caught me a bit by suprise.
Overall, nice work on the game!