With Bottle Adventure, equipping a sword through the Gear screen will affect what item is put on B if a non-sword item is on it.
If you have a sword equipped on the Gear screen, saving the game while the B button is enabled, or saving/dying while the B button is disabled causes a non-sword B item to turn into a Deku Stick. If you save while the B button is disabled, it will stay disabled. You can re-enable it (setting a Deku Stick on B) by dying on land.
No matter where you die or save on a file that have equipped a sword earlier, it is possible to turn the B button back into a Deku Stick again.
If you have never equipped a sword through the Gear menu, and you die or save the game with a non-sword item on B, you will lose the item you had on B.
This means that you cannot normally save or die and keep the item set to B when starting a NewGame+ file, or by getting a Deku Stick on B using the Lon Lon Stick Method. Fortunately, there is a way to keep your item on B...
Regardless of whether or not you equip a sword, if you save the game while fishing at the fishing pond, or riding on a horse, you'll keep whatever item was stored on B. You can also activate NewGame+ by quitting and creating a new file here.
If you travel back in time while the B button is disabled, you will get Master Sword back the next time you turn into Adult Link.
You can also use items while riding on Epona when the B button is disabled.