Some theory I thought of.

[Tani Coyote]

Which is not healthy for you, people and hedgehogs. Also, I think Shadow might have died if he'd not been found by Eggman and put into the stasis tank to heal and recover where you find him in the beginning of Sonic Heroes. (No, I don't buy the immortality deal. Immortals are just hard to kill. I take it Shadow heals quickly, survives injuries, illness or exposure that would kill normal people, but no living creature is unkillable. Yes, that's totally a word.) Memory loss is not so uncommon after life-threatening injuries. Also, back to the trauma thing, I think it might as well be considered a traumatic experience to fall from outer space like that.

It overall sounds like a whole amalgam of issues came together to tear his memory to pieces, both the first and second times. If you think about he's forgotten most of his memory two times - that we know of. That can't lead to good mental stability.

In other news now I'm imagining Eggman coming across him with third or fourth degree burns (talk about nightmare fuel), with the capsule providing a safe environment for his natural healing processes to kick in. Seeing the regenerative processes from close to the start would have made for excellent study... shame Eggman gave up on cloning and just went with robotic look alikes.

 

Sonic survived without harm because Chip saved him with that bubble force field thingy. Chip is a lot more powerful than people give him credit for.

Well yes. Chip's a God who forgot about the fact he is one.