I'm not sure if this is technically a bug, but in the Fighting Matsuri Challenge, the matching appears to be broken.

In theory, your first fight should be against someone who is close to your own level. Rarely does this happen. I have faced first match opponents who are over ten levels higher than my ninja. If you win the first match, the verbage says, "you MIGHT encounter players on a level higher than yours." I have always encountered ninjas higher than me. They are usually 10 or more levels higher than me. Ok, so no big deal. I expected a harder enemy. I lose. It then says I MIGHT encounter players on a lower level than me. In having done maybe 20 Matsuri, I rarely get matched to a lower level player after a loss. When I do get matched to a lower player, it is a ridiculous matchup. They are more than 10 levels lower than me. However, more times than not, after a loss, I get matched to someone higher than me. I don't think the matching is working like it should. I hear the same thing from many of the people on my server. The matching is ridiculous.

As it is, the current matching is like a yo-yo. Win or lose, one match you face someone ten times as strong and then the next match you fight someone ten times weaker.

Ideally from the descriptions, the matching would be as follows:

Starting fight: plus or minus 2 - 3 levels of your own ninja.
With each win, you would incrementally face opponents 3-5 levels higher than the last fight.
With each loss, you would incrementally face opponents 3-5 levels lower than the last fight.

Thanks