Without limitations, he could also pick up that same dirt and turn it into a fusion bomb. Without super strict (and very specific) limitations on an ability like that, its way above any of the tiers in LeeRoy's list. Even with those limitations, it's still a really powerful ability on its own, even without the energy absorption, cloaking, and firearms.

As far as constant evolution, it's an awesome ability to have in a story setting, but in an arena setting it means that he'll just be getting more and more powerful until nobody else in the RP can even scratch him, much less beat him. Constant evolution, I'm afraid, is an arena-breaking ability. Adaptation, on the other hand (reacting to specific threats based on pre-determined capabilities), is entirely possible given sufficient limitations and vulnerabilities.