Straight: Pete's characters use frowned-on tactics and blatant rules exploits.
Exaggerated: Pete claims he wants a real challenge, despite flattening entire worlds before the game begins with overpowered characters.
Pete plays the game as any normal character would, but he always gives his character the personality that would encourage them to get the most powerful items as well as above average charisma and intelligence during each game.
Bob is The Real Man; he loves winning fights, but his character, while very strong and skilled, isn't quite a Game Breaker.
Pete's playing a game you can win and he's just doing what everyone else does.
Double Subverted: Pete did, however, only choose that combo so he would be able to simply convince the traveling mage in that module to give him the potion of godly form, rather than doing a long quest and then another one to find the mage again. This is, of course, his FIRST step in getting the best items without having to take the module's expect and much longer route.
The character has maxed-out manipulative skills and stats to give Pete more scope for in-character improvisation. It seems Pete is using those skills to get the most powerful weapons and items, but it turns out the GM asked Pete to do it, as later Pete's character gets kidnapped and the quest is then to save him.
Pete's character is made to be a sneaky and stealthy character which the group lacks so he can make up for what is otherwise missing in the group. This makes him nearly useless when close quarters combat is involved, but in any situation where a lock stands in the group's way or security systems have to be broken, Pete's character gets them past it easily.
Averted: Pete doesn't care about winning at all, he just want to has fun with friends. His character is well-rounded and adds dynamic to the party.
Enforced: The Killer Game Masterexpects players to be munchkins and his scenarios consist of throwing them up against ludicrous odds just to see how they'll worm their way out of them.
Lampshaded: "Pete has the power to level the legions of all 9 circles of hell and we just started this quest!"
Exploited: The DM plans ahead and in one of the first modules Pete picks up an abnormally good sword, but only pete would see why it was good. Later, when Pete tries to kill the demon who's the cause of the main quest, it turns out it was the demon's sword and it gives a good in character way for Pete to lose a good chunk of power.
Defied: The DM vetos any and all overly munchkin acts. So long as they are out of character, anyway.
Discussed: "Pete, how come your character is so much better at this than mine?"
Deconstructed: Pete's characters are rejected again and again, and when he throws a fit, he's ejected from the group.
Reconstructed: Pete has a Killer Game Master. His characters uses overpowered combos, however because of the DM the other players actually like playing with Pete because he often gives them a fair shot at actually playing the game. The DM also happens to expect only the rules to sufficient to take the players down, meaning that Pete is also well suited to counter the DM at any point. Also, when not playing against Killer Game Masters, he doesn't use every tick he can for the sake of levels.
Played For Laughs:
Pete comes up with absurd plans and combos. That's why the group keeps him around.
The campaign is designed to have the party focus on puzzle solving, Stealth-Based Mission, and talking their way out of trouble - and even slight use of violent will result in Cool and Unusual Punishment. However, the GM isn't too cruel, just has very strong sense of humor. As Pete's character is purely designed for combat and nothing else, the long string of critical fumble lead the events in hilarious way.
Back to Munchkin with the mouse-clicking skill you traded your ability to wink for during character creation.