From the Super Mario Wiki
An Absorbing Mushroom is a special item found in Mario Kart Arcade GP. It is just a blue ordinary mushroom. When used, a color-vortex appears on the player, and the player is given the ability to steal an item from another player for a limited time. If the player hits another rival, the rival's item is transferred to the player. This item can be obtained when the player plays as Yoshi and wins a course.