Have to agree with Gustavos on this one
While your fight interactions between the sprites were very well done, the environment interactions weren't, including Mario's nap, Knuckles smashing through the ground, the diagonal camera change, and Knuckles' changing the weather. And no offense, but this does seem to have a heavy influence from Super Mario Bros. Z: the slowed major action points, the flashing eyes to show a special attack, and showing ice knuckles up close as a drawn figure when he shot the ice spikes.
You've done a good job so far, but it still needs improvement, and you should try to not follow the SMBZ style quite so much, cause while Ice Knuckles is cool, he still feels like a play on Fire Sonic.