It's hard to tell exactly how the stage will function, but if we were to make a guess, we'd say it might behave similar to Flat Zone from Super Smash Bros. Melee. In that level - which is inspired by Game & Watch devices - players would have to battle one another as backgrounds changed to various Game & Watch games. Similar to the newly-unveiled Game Boy stage, Flat Zone featured walls around the stage designed to look like the edges of a handheld device.
Hopefully the experience doesn't get too authentic, or we'll find ourselves unable to play unless we have a bright light shining on our 3DS systems. Guess we'll find out on October 3.