I cant talk about specifics yet (strike canceling etc.). What I can say is the basic new mechanics of striking alone make the AI WAY more effective.
My biggest issue with the AI was that I never get KO'd on my feet in UFC 2. I've probably played the AI 1000 times since release and I would say I've lost by KO standing up less than 1%. The only thing that increased that number a little is because I play with house rules and dont ride high block.
The reason for the lack of KOs is because of the combo multiplier, lack of 1 or two strike KOs and the high block being too effective. When I played UFC 3, the AI was more effective simply because you could get hurt by a single strike if you werent careful.

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