The Time Capsule, which allows communication between Generation I and II games, functions as a trading mechanism instead of a transferring one. Most significantly, this means Pokémon with trading as their only evolutionary requirement — Kadabra, Machoke, Graveler, and Haunter — will evolve when traded.
The Time Capsule will not evolve the Pokémon that need to be traded while holding an item (Poliwhirl, Slowpoke, Scyther, Onix, and Porygon).
