It's time for grandma.
Kazumi is Heihachi's wife and a member of the Hachijo Clan which is known as the assassin clan with Devil Gene so they are probably strongest clan in the universe which can also be confirmed by the fact that Kazumi was rivals with Heihachi before they fell in love with each other, so she must have had enough strength and talent to at least keep up with him. I bet even in base form and the girl was taught martial arts by Jinpachi. (personally i think that another person from Hachijo's clan and not related to Mishima could be a good villain for the next Tekken game but that's not what i'm talking about here) As a person who was to become a threat to the world possessing Devil Gene and trained by probably strongest (or one of) people in the world and being a rival of his son who had even greater potential she promised to be a really powerful character but was she actually so strong? not necessarily.
In fact she fought against Heihachi which alone should put her high but it was younger Heihachi (which was probably also weaker than he is currently) and i don't think he wanted to kill her because hed a tear after battle and screams her name he was probably concerned about the fact that he had to do it. Personally i like to think Heihachi had to struggle against Kazumi a lot more like he did with Kazuya but not really. Let's also take into account that this Heihachi is probably weaker than the one from Tekken 3 who lost to Ogre, whom Paul (basically an ordinary person) defeated (the only thing that can be said in defense of Ogre is that Heihachi weakened Ogre and Paul only finished him off but still should be likely stronger than Kazumi) so Kazumi is quite weak in comparison. For me Kazumi as someone with such impressive power should be far stronger than likes of Paul for me her base form should be comparable or superior to Paul and definitely should in Devil form force Heihachi to really go all out. I don't mind that Heihachi wins this battle because the guy is really strong but at least she should give him really tough battle.
As for her tier
This is her scale according to story events
Normal Mokujin = base form
Silver Mokujin = Devil form
Base Kazumi it's hard to say how strong she is but she's definitely somewere around low, mid and high tier which could put it even lower even Kuma II... a character who should be world threat...
and this is the level i would give her myself
In my opinion Kazumi should be around that strong since she rivals Heihachi from the beginning so she should be comparable to other Mishimas and as for her Devil Gene form we have seen (although mainly non canon when Devil Gene users could actually be a threat to the entire world and a person with such impressive things like Kazumi should defiintely be among the strongest characters in series and no ordinary human or animal (for Tekken verse) should be able to surpass such character.
(Part 4 will be about Jack)
