The way you seem to be arguing it, these two would be completely unable to defend against each other's abilities and whoever shoots first wins, because 'Ki' doesn't interact with 'Prana'.
Why should it? There is no universal law that dictates the energy infrastructure of free-form. People create all sorts of things that behave in all sorts of ways with a multitude of fluff to either justify its properties to keep others from using it or for flavor. There are and were profiles of completely custom builds using energy types only unique to them to avoid abiding by "realm energies" which is a testament that not everything has to be connected by the way YOU describe them.
Also whoever shoots first wins is the ideal situation of combat, but that's unrelated to what you are subscribing.
The most we can do with compatibility is compare it to each other and their properties. We determine the behavior based on what was described. Dread energy deteriorates shit. So we throw lightning in? Well the behavior and ability of dread behaves one way so we abide by that. We cannot say lightning is unaffected; however, lightning is fast so we take into account its property and behavior equally. In this case it'd be based on what was constructed in the fight, how players described them, and what inherent properties they manipulate if any. In that situation it is word for word. The conflict is HOW both of them behave when in contact. Pollen's shroud, for example, describes how dark particles attack and slow down fast moving objects. We ranked it as S3 because despite what it can do it is limited not just in volume, but in ways I won't describe here without ruining a player strategy. It can still be interacted in a variety of ways meaning you don't need a specific build to handle it. How would this be compatible with Ether? From what I can see Ether is the engine of energies in a universe for magic or whatever, but who else abides by that? What if my world doesn't have ether. Are you going to say it does because you described it as such? Who are you? Do you understand where this is going?
We do not adhere to realm energies. We don't mind you having it to a specific extent (stacking not withheld) because that is how your characters operate. You use "ether" to generally pull from a variety of different types of energies to "fight" opponents with more specific builds and the potential to broaden its application for things that are more unique or obscure makes it a catch-all for stacking. You can draw from it or generate it, but to describe your opponent as using Ether when they explicit never used the term is Godmodding. This is the same debate from Discord "My magic vs your not magic" and my stance has always been:
If it isn't what you describe then it isn't your type of energy.
That is one of the basic free-form functions back when people used "chips" or devices to cancel out all magic in an area. Players will go "well I don't use magic" and then another will bring up the definition of magic in a fruitless attempt to blanket their foe in reclassification; however, the definition of magic works against them by virtue of "well just because YOU don't know how it works doesn't mean I don't" which can reclassify what you believe to be magic as not magic. The opposite is also true because if I copy and pasted how a m1911 works from ammunition type, powder, to the simple hammer ad decided to classify it as magic in my profile then it is magic.
Luchalliance players, however, have adopted a system whereby just about all mystical/supernatural phemonenon fall under the broad heading of 'Ether', and in which any/all users of ethereal abilities are able to match with any/all other users of ethereal abilities. Player A's Ki-based defenses and manipulations work against Player B's Prana-based manipulations and defenses, and vice versa. The system is intended to universalize applicability between different schools of magic or energy manipulation to better facilitate play.
Which is why I said "We don't do what you do in your own roleplay". Your personal energy catch-all is incompatible with whoever says it isn't to them.
This concept is so fundamental to how we play that I'm not actually surprised nobody ever explained it, we just assume it without thinking about it,
That was a critical mistake on your part entirely because you
assumed it is universal on an ooc level. It isn't. It is only universal when people accept it as such. The main issue we had in this tournament are people not reading the rules:
Stacking - To place many different and/or unrelated powers/abilities on a character is regulated. There is no determined number of power(s) a character has access to, or how many different abilities a character can enact due to a specific power. An endless stack of limitless potential is restricted based on how wide of an application each power has in perspective to their potency; likewise, numerous applications of one power may also be regulated. This ruling will encompass any and all equipment too.
4th sentence of that ruling. The Stacking ruling is regulated because it is hard to determine how much or how little something can be considered stacking making it a very hard rule to enforce; however, a blatant amount of stacking, such as Ether, can easily be identified because it is a universal "realm energy" that can be used for anything and everything. Read the rules. The problem isn't compatibility. The problem is that you, and your crew, don't read. That isn't an attack on you. That is an attack on your ideaology to roleplaying because you cannot take the time to accommodate to the game you are playing, and then make the assumption that I will accommodate to you. This is what got Ultron rejected.
If it was such a fundamental law we wouldn't have this kind of discussion. No one would.
but nobody here is trying to get one over on the rest of the tournament. Our stuff works on you because you're a body and that's what it's targeted at, but in turn all of your stuff also works on us, because they're ethereal abilities and they interact with our ethereal abilities in the way they're meant to.
That is an assumption you are making. My main's doesn't use ethereal shit (not anymore specifically) and is classified at best as "natural" or metahuman at best. The core function of MY character is physical down to the brain, but it doesn't subscribe to how you'd describe ethereal. We are compatible as we aren't. I don't even know what Ethereal is outside of the definition, and this is a HUGE problem with regards to how powers work. No one has a clear-cut agreed way of something working in a particular way because it doesn't exist. Roleplayers in a chat server somewhere in a tavern setting probably don't even know what your brand of ether is and if they do agree they had no problem interacting in roleplaying without it.
Because that is literally the point of Fair Play.
Fair play can be misinterpreted for anyone's individual benefit.