Wallace’s effect allows you to choose one of your Water-type Pokémon in play with a maximum HP of 50.
If your Pokémon’s maximum HP increases to more than 50, such as with a card effect, you can no longer choose it for Wallace’s effect.
Example: If you have a Staryu with 50 HP in play and attach the Pokémon Tool Giant Cape to it, Staryu’s maximum HP is increased by 20. Because Staryu’s maximum HP becomes 70, it can no longer be chosen for Wallace’s effect.