The Optimize button is used to have the game automatically choose a team of Pokémon for the player, serving as a quick team chooser. However, it doesn't take into account the stage disruptions and the Pokémon's abilities; that is up to the player to figure out. It appears when the player selects a stage, under the player's current Support Pokémon.
For the first slot, Optimize will choose any super-effective Mega Evolving Pokémon. Subsequent presses will cycle through any other Pokémon that fit the description. If no super-effective Mega Evolving Pokémon are found, it will choose any Mega Evolving Pokémon. If the player doesn't have any Mega Evolving Pokémon, it'll choose the same way as with the other three slots.
For the other three slots, Optimize will choose super-effective Pokémon with the highest attack power. If there are multiple Pokémon with the same high attack power, it will choose them at random. If no more super-effective Pokémon are found, it will look for neutral-effective Pokémon. Not Very Effective Pokémon will not be chosen at all.