I simply imagine Mugen as a bizarre little fight club between the characters. but I always loved the idea of KFM as a character. not just a simply set of moves and a baseline for the other characters made after him but as the Ultimate Underdog of mugen. In a multiverse where anything and everything is able to fight you with powers beyond what a moral could hope to achieve and bosses that rival the strongest characters...you have a simple Practitioner of Kung-fu that doesn't even have Dan's level of Ki/Chi/whatever power nonsense going on. most basic characters of mugen have at least some supernatural power to get them a chance. but KFM is simply human. hes not weak because hes a bad fighter but because hes only human in a world of supers trying to fight. yet despite how outmatched he is or how ruthlessly his opponents body him, he stays humble and offers a chance to teach his opponents no matter who or what they are. KFM is the purist form of the fighting game spirit...unyielding to defeat and humble in victory.