Yes that does appear to be irritating. I presume there is no way to fight using intelligence-based attacks at that particular stage of the game, hence the forced loss of the ability? Anywhere the player is forced to make a self-defeating move is problematic, since there must be a good reason or the player will cry foul. Even an inffectually weak intelligence-based attack would be better than this scenario, and especially if it created a comparitively larger power for the character, later in the game.
So a gameboy (and its emulator) would do. I'll remember that for later. Thanks. :)

Your options are:
* Fight (may result in intelligence loss, which is the problem I mentioned here)
* Cast a spell (but requires MP and uses up MP, so not an option if you're out (even Osmose requires MP to cast in this game)
* Use an item (requires an item to use, and depending on how you play, it may be a while before you get an infinite use item; unlike FF1, you can't waste a turn by using an item that does nothing)
* Run away (if it succeeds, your whole party has run away and you get no rewards for the battle (not even for actions already performed, unlike in SaGa 3 DS; this is a reasonable option for non-runnable encounters, but sometimes you can't tell if an encounter is runnable or not)

The PSP version added a Defend command, which would have solved the issue, except that that version is based off the GBA version which doesn't have stat losses in the first place!

(By the way, forcing the player to make a self-defeating move can sometimes be an intentional feature of a game's design; Nim, where taking the last piece causes you to lose, is an example here.)

By the way, other differences between the GBA and PSP versions of FF2 are:
* Saving and loading is faster in the GBA version.
* After a battle, on GBA the music will continue where it left off; on PSP it starts over.
* There are a small number of cutscenes that were added to the game in the remakes. They are skippable on PSP but not GBA.
* In Soul of Rebirth, a certain spell that only Minwu can learn is much stronger on PSP than on GBA; strong enough that it works well as his main form of offense. (Note that this does not apply to the version of that spell you get in the main game, even if you manage to smuggle it into Soul of Rebirth.)

The Defence command would be a big improvement, especially if it was a zero- or low-cost alternative. The recent ASCII-graphics game Sanctuary does some interesting turn-based game mechanics like this.
It's called Zugzwang in chess when whatever move the player chooses will result in a worse situation.
What are the relative prices for the games on each system? Second-hand market opportunities?