"Shirtless Mario!" is a skin mod that lets the Italian fighter trade his iconic overalls for swim trunks.
Super Smash Bros. on the Wii U already has alternate costumes for some characters along these lines, including Xenoblade's Shulk, so the shirtless mod would have seemed like a natural fit for the game long before the Mario Odyssey gameplay from this week's Nintendo Direct confirmed that Mario does in fact have nipples.
The mod was created by SmashingRenders and provides the skin in both the game's UI and in matches, with a metal version as well.
— Trying & Failing (@SmashingRenders) September 15, 2017
Some players have already started uploading video of shirtless Smash Mario in action and the results look pretty seamless. By the end of the year (month?) I fully expect the bathing suit version to have made it into every previous Mario game.
You can check out the mod for yourself here.