Note: This glitch also works in the HD version, but the results it gives are slightly different. Click here if you're interested in the HD version of this glitch.
After defeating a boss for the first time in a dungeon, the game saves your inventory for later use in the Trials.
When entering a Trial in Ganon's Tower, the game is supposed to write your current inventory somewhere in the ram to save it, and give you back the inventory you had when you first fought the boss in its dungeon. When you then end the battle, the game uses the ramvalues and copies the saved inventory into your normal inventory, giving you back your items. That is a Normal Trial.
However, by fighting a boss in its dungeon without the telescope (done by performing Outset Escape), then the Trial associated with that boss will enter a Glitched state. That is probably because the game is looking for your telescope first in order to find your inventory. Since you didn't have the telescope when you fought the boss, the game fails to change your inventory and you get to keep your current items. This is a Glitched Trial.
The ramvalues used to save Link's inventory aren't wiped when quitting a file. This can be used to transfer items from one file to another, or delete most of your items.
When you enter a Glitched Trial, the game fails to give you back your old inventory and also fails to save your current inventory into ram. When no earlier data is written to the ramvalues, and you leave a Glitched Trial, the game tries to give you back an inventory that it didn't save. The game then overwrites the inventory with what it can read, only 00's when no set up is done, resulting in all items involved with FIT either being removed or turned into item id 00 (which look like bottles in your inventory, and do nothing).
This can however be used in order to transfer items from one file to another. By first entering a Trial in a Normal State, Link's inventory is saved into ram, and by saving and quitting, the ramvalues used to save Link's inventory aren't wiped out. By then entering a Glitched Trial and leaving it (by saving and quitting for exemple), since the game failed to overwrite the old ramvalues with the new ones, you will get the items written previously into ram: the items from the file that entered the Normal Trial.
To transfer items from one file to another, you will first need a file that has a Glitched Trial (called the main file), and a file that has a Normal Trial (called the setup file). The main file will receive items from the setup file (and it can only be that way).
On the setup file, enter a Normal Trial and quit to the title screen (saving or not doesn't matter). Then on the main file, enter a Glitched Trial. Then simply save warp, and you will now have the inventory from the setup file.
Here is a list of what gets transferred in between files:
And here is what does not get transferred and doesn't interact with FIT no matter what: