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He doesn't actually say that at all. Shadow only says that he'll either fight on equal terms or not at all in response to him preparing to fire a sneak attack using a new power at Sonic. It's a showing of Shadow's honor, not Shadow admitting any inferiority.Yeah the arg was if base Shadow is above Metal Overlord, which is still up in the air.
Shadow does say he’ll never reach Sonic’s level but never specified if it’s base or super.