The demonizing of John Kreese.

"Out of commission" means taken out of the tournament decisively by getting beaten badly.

Can you not understand english?

It does look like a rather far-fetched scenario, especially in real life. To play devil's advocate, it's likely that Silver was not strapped for time and being a somewhat eccentric billionaire, decided to embark upon a new type of "adventure" while at the same time doing his friend's bidding. However, it's somewhat odd that Silver didn't eventually change his mind about the whole scheme due to developing an attachment to his student, as Daniel was nice and polite to him, perhaps even starting to view him as a mentor figure.
It's never explicitly stated in the movie, but Barnes may have been an emancipated minor. I think that he didn't really hate Daniel or have a personal issue with him...it was more a case of Barnes being competitive to the extreme (always giving his best when fighting) and also being concerned that if Daniel doesn't show up at the tournament, then he won't receive the reward from Silver, as specified in the contract. While I think that Snake and Dennis were successful in providing further comic relief, they were indeed far from being in Dutch's (and Tommy's) category when it came to the intimidation factor.

Kreese was showing him a new move that might help sharpen his skills for future tournaments. We later see Johnny using the same technique on Miguel in Cobra Kai. Miyagi rudely interrupted his lesson (not for the first time) and created a scene. The crooks on the All Valley board should have banned him.

"Who said it was in the movie? You said "Strike first" = assault and battery (which is a crime),....It doesn't."

Yes, it does. If you "strike first", period, that's assault and battery. You can't refute that by adding a qualifier ("when you feel threatened") that's not even in the movie, because "strike first when you feel threatened" is not the same thing as simply "strike first".

"He said it was open season on both of them."

I already said that, and that's a threat of violence, which is a crime.

"One of which an adult who allegedly attacked and beat up his students."

So? That doesn't make it legal to threaten someone with violence.

"Violence had already occurred and maybe thre police should have been involved at this point to decide whether or not Miyagi was legally right to do what he did eh?"

That's irrelevant, obviously, as it has no bearing on the fact that Kreese's threats of violence were crimes. And not that it matters, but Miyagi acted in defense of Daniel and himself, and never "struck first".

"No, but he did say (and this is your quote) A man confronts you, he is the enemy. An enemy deserves no mercy. Confronts!"

What of it? A confrontation isn't necessarily threatening/violent. For example, Daniel confronted Johnny over the radio incident on the beach, but there was no threat of violence from Daniel; he was simply opposed to what Johnny was doing (which was criminal behavior, i.e., destruction of someone else's property). Then Johnny, following his teachings, simply "struck first" by pushing him to the ground (another crime).

"As for his students striking first in the movie many times, again where is it in the movie that he tells his students to go out as a gang and pick on people? This is their doing and not his instruction."

Is that a joke? His threat to Mr. Miyagi and Daniel was that if they didn't show up at the tournament then it would be "open season" on them. That goes beyond telling them to merely "pick on" people, he's telling them to violently attack people for no reason other than them not showing up at a tournament, which obviously isn't legal justification for violently attacking someone.

"In a tournament it would not be classed as cheating. An infringement of the rules at worst"

Is that another joke? Infringement of the rules is what "cheating" means, obviously.

"and then only if the referee had shouted Yame (the instruction to stop fighting and return to starting position. Where are you getting your information from?"

Don't be ridiculous. In the dojo scene, the point had already been scored, the kid was down on the mat, and the kid who scored the point had already gone back to his starting position and was just standing there. Then, following Kreese's order, he walked over while the other kid was down on the mat and hit him again. If those exact events played out in a legitimate tournament, it would obviously be cheating, i.e., an infringement of the rules.

Long before the "out of commission" scene we see that Kreese has no respect for the type of laws that are meant to protect people from violent thugs (which is the most important type of laws that we have, because if you don't have laws protecting you from being wantonly maimed or killed, then what good are any other laws?), since he breaks the law when he threatens Daniel and Mr. Miyagi with violence, so why do you think it's out of character for him to have no respect for mere tournament rules either?