Hostile Spirit Alert: Bloody Kimono

First, note the bound spirit below. There will be no time to capture it after this battle.

This is what it has come down to: Sae. Fortunately, she has no instant-kill attacks, and so a decent supply of medicines will keep you in action. She is also surprisingly weak, taking just a few hits - provided you use Type-Zero film and the occasional Zero/Blast/etc. The cave is occasionally rocked by earthquakes, but unlike a certain Kirie encounter, these will not cancel the viewfinder or affect your movement.

Sae spends most of her time enshrouded in red mist, which renders her completely invulnerable. It also makes her much easier to spot against the monochrome spirit filter. Even if you can't see her, you can probably see the mist. She will either stand and laugh, or start running for Mio if she is close enough. Avoid. The Evade function works here, too. After a while, she vanishes.

After three of these, Sae appears without the mist. This is your cue to attack. Get closer to trigger the lunge, and then wait for the shutter chance (or even subsequent fatal frame). Nothing less will damage her.

When she is finally defeated, the scene briefly whites out. Sae then stands in front of the abyss, just a few steps away from Mio. When she attacks, hit her with a shutter chance to push her backwards into the pit.