Equipping a character with the Broly Ring will prevent them from transforming or merging.
If you’re wondering what great useful purpose this serves…actually there isn’t. It’s great for pranking local multiplayer friends (if you equip your Player 2 profile set with this feature) and for personal role-playing scenarios. Items won’t help you in actual matches unless you get better at limiting yourself.
Broly Ring functions similarly to previous games, and while there have been many claims that it will also affect opponents, in my experience this has never happened. I’m more inclined to believe it shouldn’t work this way, since the description doesn’t mention it being possible. That being said, there are definitely holes in the project, and it’s impossible to say whether this affects how it works.
Broly’s Ring works on any character who can transform. A fighter like Goku would feel very limited without the ability to perform various hair color transformations. Broly’s Ring can even prevent fusion, making it more difficult for Gogeta or Kefla to reveal themselves in a match. Unless there’s a false cacophony and it’s intended to work on an opponent, there’s no reason to put it on a character who can’t transform.
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You should be able to use this item in all modes except story-focused episode battles. Most people will definitely use it as a fun way to limit battles with friends, or perhaps role-play with the computer. It’s certainly not fun when Vegeta transforms into his giant ape form and is no longer available for impact action quick events. This also isn’t of much use when creating custom battles, as you can freely adjust whether your character can fuse or transform within it.
I can also confirm that Rings of Broly will be an option when preparing for online play. However, I can never find a ranked match in the game if one of my characters has the item. One time I managed to find a non-ranked match lobby that allowed the use of items, but I was disconnected once the match started. These problems have not arisen at other times, so I currently do not recommend playing online with rings.