Stupidity: The final fight is advertised on every wall, everywhere in the newspapers, and with TV and radio coverage. The fight with excessive violence the Mafia is doing to have a hostile takeover of a business. It does not make a lot of sense. The plan the bad guys try to implement here, is using famous respectable dojos to sell drugs. If they show the violence and non-cooperation of the owners, the legitimacy of the business and its appeal as front kinda goes away. Which really also underlines how stupid the whole plan is and how easily it would be exposed.
Stupidity: Scott spread his lie about the protagonist telling Dean, who tells Frank (without details, just that the guy is 'a good fighter'). So barely one person (acting rather childish for a supposed master) has any animosity towards the new fella. There are over two dozens people in the class (in a 'good guys' gym, not one of those evil moustache twirling villain dens) and yet everyone is happy and cheerful watching a black belt beat the snot out of a schoolboy redbelt, for no reason. Most people there are grown-ups and there are black belts; they should be horrified or at least VERY puzzled. (00:30:00)