Ladies and gentlemen, we got him. Amazing game, can't wait for Part 3!

I thought I would explain my strategy for anyone watching. A lot of how I counter Sephiroth's moves are based on TSouL22's guide so shout out to him. He has a great video with commentary that you can check out here:    • Sephiroth Reborn 【HARD MODE】 Full Bos...  

Some general setup tips. I used Umbral Blade for Cloud's weapon since it has Reprieve, and I used Plumrose Rod for Aerith due to it's high magic power and Enduring Ward ability. You definitely need Precision Defense Focus and Steadfast Block on Cloud. I recommend only using Level 1 or Level 2 magic spells throughout the majority of the fight to conserve MP. Depending on how you performed in the previous fights leading up to this, you may not have much MP on Cloud. I had less than 50% MP so I had to play it conservative with magic until the end when I was going for the KO.

I had Healing-Magnify on Cloud and Healing-Auto Cast on Aerith. I thought this was a mistake at first, but having Auto Cast on Aerith actually proved to be pretty beneficial as you'll see in this video especially in the last phase. I also put First Strike materia on Aerith so I could immediately use Arcane Ward at the very beginning of the fight. It's extremely helpful if you have the Enduring Ward weapon ability as the Ward will last the entire fight.

After using Arcane Ward, switch to Cloud and begin dodging Sephiroth's moves. You can dodge or counter most of the named moves he uses with good timing. He will use Whisper Cannon pretty early, and you want to rotate counter-clockwise to get behind him then use the Spell Blade synergy skill to pressure him. As soon as you see that he's pressured, use Focused Thrust with Cloud, then immediately switch to Aerith. Make sure she is inside her Ward and if not use Ward Shift to teleport her there, then cast Fira. As soon as you cast Fira, switch back to Cloud and do another Focused Thrust. If timed correctly, this should stagger him.

If you don't stagger him, he'll probably be within one ATB move of being staggered, so dodge his moves and try to get off either Focused Thrust with Cloud or Fire with Aerith to get him staggered. Even if you aren't fast enough here, he will soon do Whisper Whirlwind. When you see him start to use this move, make sure you are controlling Cloud so the Whirlwind goes after him. As soon you see the Whirlwind is targeting Cloud, switch to Aerith, put her inside the Ward, and cast a Fire spell at the Masamune sword. This should break it no problem and pressure Sephiroth again, or stagger him if you didn't stagger him on the first pressure.

During the first stagger, use Spell Blade twice and then end with the Firework Blade synergy ability. This is crucial to getting Aerith's limit break to Level 3 as I will explain later.

After stagger, you'll have another phase just like the first one where you dodge his moves until he uses Whisper Cannon. Rotate behind him, hit him with Spell Blade, then repeat the same moves as earlier with good timing to stagger him again. This time you probably won't have synergy available, so use Braver to finish.

Following the second stagger he will use Heartless Angel which takes both of your characters down to 1 HP. I had Healing-Magnify on Cloud, so I cast a Cura spell to heal them back up. I had limited MP with Cloud, so I only used the Level 1 and Level 2 healing spells to save on MP. A few times in failed runs I tried Curaga after Heartless Angel and felt like it took too long to get the spell off. Sephiroth would KO one of my characters and I'd have to start over. Cura was the sweet spot; just enough time to heal up and get back into my flow.

Continue dodging his moves after Heartless Angel and in this phase instead of Whisper Cannon or Whisper Whirlwind, he will use Octoslash. You must hit him with Spell Blade twice to pressure him before he gets Octoslash off! Once pressured, repeat the same moveset to stagger him again. During stagger you should have synergy available again so end with Firework Blade. This will raise Aerith's limit break to Level 3 and by this point in the fight her limit gauge should be filled and ready to use.

If you've landed all your moves during stagger, this should get Sephiroth down to enough HP where he initiates his final attack, Tempus Finis. If Cloud's limit gauge is not full, use Aerith's Level 3 limit break to top him off and then get in close to Sephiroth and use Cloud's Level 3 limit break. Unfortunately this did not KO him in my run, but I had 2 ATB and was able to cast Firaga with Cloud to finish him off. You can see Aerith coming in clutch with the Cure-Auto Cast spell there at the end to keep Cloud's HP topped off enabling him to tank some of Sephiroth's damage and pull off the finishing moves.

Hope this is helpful to anyone still trying to beat this. Good luck, you got this!