Thanks for doing some testing! I think that might be right -- it's a frustrating condition, and probably a bug (?)
In case anyone hasn't already seen, 7-star Pikachu is a little different this time around. It has the typical 20/30/70% shield modifiers this time instead of 1/70/120%, and it doesn't have any EVs.
...and
here's a coordinated strategy in case anyone wants one.
Interesting to hear about the Knock Off thing, I never would have known. I didn't run into any issues with Mud-Slap not building tera charge myself, so maybe it was a bug back then or just another weird group thing. (EDIT: Actually this wouldn't even apply because they removed the 1% damage shield.) Finding out this Pikachu was a nerfed version was a bit disappointing though. I wanted to fight the original Pikachu at full power to make up for Azumarill missing it, but I suppose it may never truly return at this point and so we are left with a hollow shell of a mascot. Nevertheless, a win is a win even if I will count this as a separate boss, and I still managed to avoid using DLC tools or any AI that wouldn't have used its status moves back then.
Here's the full raid script for documentation, notably Pikachu starts double attacking at a 50% rate after 40% HP.
Ultimately the Azumarill solo did happen, and it took a bit to figure out how to set everything up properly. My initial theorymon from a year ago revolved around using Utility Umbrella to remove Thunder's perfect accuracy and try to start Mud-Slapping and setting up Amnesia. This didn't really help much in practice other than to start making progress in the first turns of rain, and after a bunch of trial and error I actually settled on Protect over Amnesia as my 4th slot, since Pikachu would go for Iron Tail the rest of the battle. This allows Azumarill to stall out the 5 turns of rain without having to die 3 times to start the battle, though it still does it 2 times instead. Technically Endure can work too but lol.
EDIT: Technically I guess Endure doesn't work for this final strategy's specific timing, I just saw it as an option in the TM list while teaching Protect and thought about it for a second.
I actually almost won on this attempt, but I checked stats for the screenshots and Pikachu released its energy despite the visible timer. So I wanted some extra insurance, and I decided to set up a permanent attack cheer for a 1.5x multiplier. In earlier attempts I was trying to either save my heals or get away with 2 defense cheers to make use of the stacking mechanic, but it wasn't really working out or necessary at that point to survive the hits, and I just settled for Mud-Slap dodges being enough to let me Belly Drum and Shell Bell heal the rest up, which is even more effective with the attack cheer.
In terms of AI support, I left it random. Bellibolt scared me because of Lightning Rod, but it surprisingly did not Discharge and just used Light Screen/Mud Shot whenever I got it, which has annoyed me in the past but was actually nice now as a rare form of speed control alongside Garganacl's Rock Tomb. Gardevoir and Umbreon can paralyze Pikachu through Synchronize, if it goes for Thunder on them which it might just not due to its other SE options, but I've seen it happen though it might also come down to Intimidate dissuading it or random double attacks. Intimidate is helpful after terastallizing because Pikachu prefers to Iron Tail Azumarill. Sylveon still helped a bit here with Moonblast taking it to -1, though it did lose some turns defense cheering T1 and dying.
The first 5 turns go as follows. Azumarill takes the T1 Rain boosted Surf and Protects, allowing the AI to take a turn and set up the defense cheer. Max HP Azumarill can likely survive Surf + Thunder with a defense cheer, so this is an opportune time to Mud-Slap on turn 2 and then set an offense cheer while dying on turn 3 to preserve both cheers, barely still active. While Pikachu will reset its stats due to hitting 80% time after fainting, it also triggers the tera steal, so you might think this is pointless. But fainting removes Azumarill from the field before time is taken away, and so Azumarill dodges the tera reset by not being a target.
0+ SpA Light Ball Tera Water Pikachu Surf vs. 252 HP / 0 SpD Azumarill in Rain: 110-130 (27.2 - 32.1%) -- guaranteed 4HKO
0+ SpA Light Ball Tera Water Pikachu Thunder vs. 252 HP / 0 SpD Azumarill through Def Cheer: 240-284 (59.4 - 70.2%) -- guaranteed 2HKO
(This is the 2nd death and I only just screenshotted it halfway through the revival timer.)
On turn 4, I Mud-Slap again and die on turn 5 to similarly dodge the 65% time tera steal as well, which I have seen happen by inputting too slowly. By this point the rain is gone and Pikachu can't see clearly anymore at -2 accuracy, so I go for the 3rd Mud-Slap and get full tera charge. Pikachu did hit a 168 Thunder to take me down to 234 (healed 1 from Mud-Slap Shell Bell). I think Sylveon's Moonblast did make this range possible to allow me to go for the tera Belly Drum immediately, but I think I could have set a 2nd defense cheer or rolled on heal cheers in time.
-1 0+ SpA Light Ball Tera Water Pikachu Thunder vs. 252 HP / 0 SpD Azumarill through Def Cheer: 162-192 (40 - 47.5%) -- guaranteed 3HKO
Pikachu tried to finish me with Surf but missed its coinflip, and so I managed to start the assault and get in a comfortable Shell Bell healing range. Pikachu then started going for Iron Tail and we traded 2 mutual misses at first before hitting again, but in the end it was an inevitable victory for Azumarill. It might have given me a little trouble if it landed a few Iron Tail defense debuffs or double attacks, but fortunately it didn't have many turns to do that.
+6 252+ Atk Huge Power Azumarill Atk Cheer Play Rough vs. 0 HP / 0 Def Tera Water Pikachu: 2175-2559 (20.6 - 24.2% of 50x hp boss) -- guaranteed 5HKO