This is a summary of my AI ratings based on my observations on what characters are capable of defeating. Aside from the AI coding itself, the character itself also has an effect on the AI ratings (something with bad AI could be carried by its moveset and/or gimmick all the way to the higher tiers). Even with my years of observations, these are still subjective and NOT absolute. In MUGEN, anything can happen, even boss level characters somehow losing to small hitboxes or superarmor. This is not a definitive or an official guide. This is just something I tossed together for my own amusement.

?? GIMMICK: Can't really be defined by any level of testing. Can beat the best of the best only to lose to the worst of the worst. Bokosuka Wars, your typical Divekick-type character,
-1 USELESS: Truly the bottom of the barrel. Either they can't fight, die immediately, or have an overly obstructive gimmick. Sandbag, Exerion Fighter EX, NES Silver Surfer, Paprika (12P)
00 FAIL: Nigh impossible to score wins with. Too weak or self-destructive. Usually meant to be bad on purpose. Might somehow win a fight by pure luck, anticode, or fighting each other (or something even worse) Potato, Weakling, E.T.
01 POTATO: Typically otherwise capable fighters held back by no/bad AI or are just too weak to handle any real competition. They are the kings of the Beginner level, which isn't really something to be proud of. Zodiac (from The Untouchable), Ultra Magnus, Veku, way too many AI-less characters to count
02 JOBBER: Featherweights and characters that could be higher if they didn't have the uncanny ability to throw fights. Maybe they're just one-trick ponies that can at least survive. The beginning of the Easy level. Baseballman, Sun Wu Kong (with IX's AI patch, Level 5)
03 MEDIOCRE: Not terrible, but leaves something to be desired. Still watchable and capable of winning (and even pleasing crowds) on a regular basis. A very common destination for Easy level fighters. Manto (BAL's version), Kung Fu Man (IronCommando's AI), Aladdin
04 ABOVE AVERAGE: Much more solid and exciting. The kings of Easy. Golrio, Evil Q, Rario, Alien Green (with IX's AI patch, Level 5)
05 DECENT: The bottom rung of Medium. Speed (NS' version, AI Level 6), Cloud Strife (AI patched), Bloody, Biscuit Oliva
06 SOLID: Middle of the road, and I mean that in a good way. Not too powerful, but strong enough to consistently win. From my tests, these not only turn out to be the most common, but also where several of my AIs end up. Sparq, Agrias Oaks (Ouchi's version), the majority of Mass' characters (Hawk, Sledge, etc), Mecha Gorilla
07 STRONG: The best of mid tier. May struggle to win against anything higher, but will decimate just about anything below. The dominant forces of Medium. Hatsune Miku (Yu-Toharu's version), Carnage (DarkLuigi's AI), Pazuzu, Rock Volnutt (MAITAKE's version), Cammy Custom
08 DEADLY: The bottom rung of Hard, but can still pull off some amazing victories and are powerful enough to at least hang on. Predator Warrior (AI patched, AI Level 2), Magic Dunker (AI patched), Pheus Mor
09 ELITE: The mid tier of high tier (if that makes any sense to you). As expected of many middle-rung levels, this is where most of Hard level fighters end up. Jyashinsai, Wooden Doll (7-9P), Ohga (AI level 10), Temjin Arrange, Aleti
10 BOSS: The strongest a non-god tier can get. The apex predators of Hard. Azteca (BK's AI), Fernandeath (Yanagi's AI), Hulk (MGMURROW's version, Boss.cmd), Magma Dragoon (Snowwolf)
11 CHEAP: This is where any fairness officially goes to die and where Nightmare difficulty is born. Broly (BoyBoyz's version, Boss mode), Code Name O, B-B-H-Hayato
12 NIGHTMARE: Even more powerful and firmly in the realm of the cheap. Monkey D. Christ, Himeido (AI Level 3, Block AI 5/10)
13 DESTRUCTIVE: Cheapness taken to the next level. Shelby Cobra, Rekka, Gaap, Jado
14 GATES OF HELL: Some of the most powerful and dangerous fighters even beyond the lower few levels. As the name implies, it's the lowest level of the Hell difficulty. From my tests, this is the rarest level and probably the hardest one to get into for some weird reason. Goliath Doll (Soruzin), Street Fighters (Buti)
15 HELL: Some of the most powerful and dangerous fighters even beyond the lower few levels. Smasher (STG), Barbatos Goetia, Dracula (raigugiraru, ver 3.0)
16 RARE: Possibly the strongest a character can get and still be considered beatable. Rare Akuma, Master Big, A-Kain
99 GOD: Borderline unkillable, but there's at least SOMETHING out there that can defeat it. Even minor feats such as doing a pixel of damage to these or surviving longer than a few seconds is impressive. Flea, Gatanothor, Honki Ultraman, Ahojingod
256 BEYOND: Might not even be killable at all. May kill you before you even breathe. Aka Oni (some fat red demon who kills the opponent before the fight starts), Exodia
666 VIRUS: So powerful, even your computer can't handle it. Even I fear and dread these abominations. Mathrus (the urban legend)