What happens if I pick-up an item I don't have space for?

Since Skyward Sword has an inventory cap on items such as bottles, medals, and extra bags, there is a chance I could receive an item but have enough space in my inventory for it. What happens in these situations?

Also, if I open a chest which rewards me with rupees, but I don't have enough space left in my wallet for it, will the rupee be returned to the chest or will it simply be wasted?

Rupees, Bombs, Arrows, etc... will be wasted if you pick them up when you don't need them. This includes Rupees from chests; this is likely due to complaints by people like me with Twilight Princess requiring you to leave uncollected chests in dungeons.

Anything that goes into your Adventure Pouch (Shields, Bottles, Medals, extra Bomb Bags, extra Seed Satchels, and extra Quivers) will be put into Item Check instead. You can move them back into your inventory back at the Item Check stall in the Skyloft Bazaar.