When I played, Bubble didn't do anything, same for a friend. Is it growl that provoke that, or something else?
Growl lowers attack. If you growl, Squirtle become's confused, and start blowing bubbles at nothing in particular.
Just kidding! There is a bug that makes bubble not work. When the game comes out, there will be other ways of dealing with bubble. If they add "good AI" so that squirtle always uses bubble, they will add an option called "throw gum", which allows Red to throw bubble gum into squirtle's mouth. This changes bubble's element from water to rubber, which then turns the tide of battle.
(Feel free to use this idea in the game if you want to).
We're not messing around here! We could make it even tougher by programming AI to always use super effective moves on you... which we actually might eventually.
Squirtle shouldn't always use bubble in the first couple of fights. Red is supposed to have this innate connection with pokemon. While Blue may order squirtle to always use bubble, squirtle should ignore the command because Blue hasn't proved himself to be a competent trainer yet. With squirtle playing more defensively than he should, he won't use bubble enough times, and charmander will wear him down. This should make for a good character arc for Blue as he develops into a pokemon master. First he learns that bluster isn't enough to get his pokemon to obey him, so he tries other methods to get his pokemon to do what he wants. For the better, or for the worse, depending on which direction you want to go with it.