With Bad Stuff, if you are given a choice between an option that affects you and an option that doesn't,
you must choose the one that affects you. So in the Jabberwock case, you must choose to go down Levels if you have no Items; or lose all Items if you are Level 1.
Andrew's post about
Curse! Kick Yourself In The Ass that Enzzo pointed out only applies to Curses. I still find that having it as an exception is a tad weird due to how it complicates
Curse! Caaaaaaaanes! and
Curse! Butterfingers; and for the confusion it can generate between which cards provide choices and which don't, but that's how I interpret the ruling at least.