What?!?
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Yes, someone could make an Action Replay code like that. Why don't you go and try?
You can remove a capsule from a Pokemon by visiting a building with a PC, using the PC and choosing "Your Name's" PC. You should then be able to edit, move and remove ball capsules.
Remove PKMN Battle Restriction 92072702 0000D102 12072702 0000E002 D2000000 00000000
you need to steel a flag
Once you obtain a badge it's permanently stored in the badge case.