So from what I read a tad of the argument is that Lvl 2 being Michael, could beat Lvl 3 being Danica?
I'll input my own point of view which could or could not be wrong:
Michael probably could beat her IF he actually wanted to. I feel like we are disregarding just how POWERFUL Michael actually is. He's defeated Monsters close to her caliber as a human ALONE. If he truly put his mind to it WITH powers AND at Lvl 2 at that; he'd demolish her.
That all being said we have to acknowledge a simple fact; Danica is a Lvl 3. It's noted that most Lvl 1s & 2s could only hope to beat a Lvl 3 due to the huge leap in ability from the 3rd Evolution (Strengthening Phase).Would Danica beat Michael in a straight on fight? IN MY OPINION it honestly depends on the ENVIRONMENT they fight in (assuming Michael didn't prepare beforehand).
Michael lacks range and Danica excels at distance. So if they fought in an open area Michael wouldn't really stand a chance at all. Michael also lacks regen, he's durable sure but in order to recover from Danica's RIDICULOUS glass cannon power you'd need either an INCREDIBLE defense like Klaus at Lvl 3 (assuming) or ASTRONOMICAL regen ("like the MC"). So:
So how about in an enclosed environment? That's a different story. Danica COULD shoot around and EVISCERATE the surrounding to clear a path but all Michael needs is one chance to get in close by the cover of a tree, car, a wall; and he'll not only bludgeon her with skill, raw power, and technique, but also sap her Superhuman power just from the sheer proximity. If you're going to tell me Danica would be willy nilly in CLOSE QUARTERS COMBAT with her RANGED ABILITY don't, it's like bring a .50 Cal to an up close sword fight.
With the following final result, again; this is just my opinion. Overall if I made it sound EASY for Michael to win it wouldn't be; we all know that fucker has some of the toughest fights in the game so Danica wouldn't be a breeze but certainly not the worst thing he's ever faced. Danica would have to do more for me to change my opinion, so far all I have is a Lvl and we all know how just relying on your Lvl went for Gilliard. Michael on the other hand I've WITNESSED him do the damn near impossible so if you really think Danititsmigee is going to kill M i c h a e l if they actually chose to fight, you probably need to reread the game.
+1 Michael - with prep work
+1 Danica - in open field combat
+1 Michael - in a closed combat
Added note: Michael is a direct "spawn" of the 2nd aka Power. I know Danica's monster was terrifying but I'd wager Power incarnate is not only a more terrifying monster, but also power, given who has it (Maniac Michael)