Well first she needs to figure out which side to be on. She'll fly down and call out in a loud voice. "Hello there! Can I ask who's fighting and what you're fighting about?"

He's being attacked by a hidden cape with a power he's never heard of; a cape he's never heard of shows up; it doesn't take a genius to put two and two together. And he's not going to tolerate her just standing there when she can't prove she's not the bug controller.

Also, Lung is not going to play the 'help me, mysterious hero, I'm being attacked!' card in front of his men. 

Which is to say: "DIE, YOU BITCH!"

Is she any more fire resistant than her bugs? His flames can reach surprisingly far.

Well that answers that question! She can dodge pretty quickly how fast are the flames? If she does gets hit she won't visibly react though her clothes might catch fire without seeming to burn. She'll materialize a scepter and fire a stream of water down at him. The water is moving quite fast and the stream is focused enough that it's like a water cutter.

The flames are fast enough that she can't dodge all of them. They aren't being carried by a burning substance that expands at a certain speed, they just - grow.

The water cutter cuts a line across the man's chest. It's hard to see how deep it went because this also creates a rapidly growing steam-cloud, which makes it hard to keep targeting him and sends the rest of the men running.

With a visible enemy (who is not a MISERABLE BUG) willing to use lethal force, and with flying being tactically indicated, Lung and his power are feeling motivated.

He shouts from inside the steam-cloud, louder than a man should be able to. Then he throws two cars at her in quick succession, leaps to a nearby roof, and looks to see where she dodges so he can leap. He's strong enough to reach her current height, although he can't control his trajectory mid-flight and his speed obeys the laws of physics.

He is also eight feet tall and covered in gleaming silver scales.

She smiles widely though he probably can't see it. This is an exciting fight. She can dodge pretty quickly and cars are big enough to be pretty apparent in advance. Lung is a little harder to dodge but she's good enough to play keep away. Still the steam getting in the way of targeting is annoying. Hmm, she'll try her other idea instead it's a bit of an escalation but he seems like he can take it.

She switches to a different weapon this one lets her make transparent walls that float in the air and shoot balls of ice through them. The walls last about fifteen seconds and aren't particularly susceptible to fire. They do take a little time to make though. The balls of ice hit about as hard as the water stream but there's more volume they're blunter though so they don't penetrate in the same way.

The ice balls don't visibly affect him other than by transferring their momentum, which isn't much and doesn't throw him off-target since he's taking them head on.

The force wall does stops him and he slides off it, punching it as he goes down.

By the time he rolls to his feet he has grown sharp claws on his hands and feet. His next leap takes him high enough to grasp the top of the wall - and pull himself up.

He roars a triumphant blast of fire, and jumps directly for her.

She's a little surprised but she can still narrowly dodge him. She'll keep making more walls but she also tries to think. This world doesn't seem to have health bars so it's hard to judge how much damage she's doing but it doesn't seem that promising. It's kinda exciting but also a little concerning.

Well, when in doubt apply debuffs. She'll fly up a little and switch her staff out for a book. The she'll use it to fire a stream of foul smelling yellow liquid that corrodes armor. It fires with the same speed and focus as the water jet from before but instead of just going through him it spreads and clings not doing active damage after the initial impact, just weakening the metal that's protecting him.

He is tough enough by now to shrug off the iceballs even without his scales, if that's all she throws at him. He also keeps growing, and the growth doesn't seem uniform; he is somewhat hunched over, with elongated limbs suited for leaping and clawing.

Can he catch her by leaping with even greater speed and agility? (The force-walls are very helpful as platforms, he can push off with his full strength without them crumbling.)

The walls are starting to go away now that she's switched weapons and she continues to be very good at dodging she doesn't really seem to obey physics with how she can just suddenly completely reverse direction horizontally at least. She can put on bursts of speed upward too but they aren't as fast and she doesn't have a similar ability to burst downwards.

She'll stick with this weapon a little longer but she starts thinking of changing it out again.

Lung's power follows a script but it is not completely unresponsive to the challenge he faces. He is tougher because he keeps being hit. He is stronger because he needs to leap into the air, but not as strong as he would be if he spent as much time punching his opponent.

And when leaping doesn't work he hunches over and his shoulderblades split open to sprout a pair of wings, and he takes to the air with a triumphant bellow. He is not fast and agile enough to catch her, yet, but it is only a matter of time now.

"ILL OO!!!"

Hmm does he mean that literally or is he just saying he's mad. Ah well time to try a new weapon. This time she'll pull out what looks like a large spiky hybrid between a fish and an assault rifle and shoot large green bubbles at him. If she misses they'll rise into the air for few seconds before popping.

He doesn't know why she didn't use her strongest Tinkertech guns from the start, but they don't hit that much harder than the ice balls. There's more of them, but he's tougher now. The first few don't take him out, which means they'll make him tougher, and he can't catch her if he keeps dodging. So he ignores them and focuses on FLYING FASTER and GROWING BIGGER and BREATHING FIRE until he can get his claws on her. Look, he's already much more maneuverable than he was when he started flying.

... This guy definitely does seem to keep getting stronger doesn't he.

She's not really sure what to do about that. She can keep switching weapons but maybe she should escalate more dramatically instead of just swapping between weapons on a similar level hoping one is this guy's weakness.

Her next weapon looks like an enormous red machine gun as big as she is. It spins up and starts firing green homing bullets and it shows no signs of stopping. Though if Lung is familiar with guns he'll be able to tell it's firing much slower than an actual machine gun. Still five rounds a second is a lot especially when the bullets home. They're also not really physical bullets they don't over penetrate at all, always grounding their full force in his body.

Lung has, in fact, survived being shot with a full-sized machine gun! This one doesn't really compare. The individual bullets are only as strong as a pistol's and the rate of fire is much lower. It might be a problem if they kept hitting the exact same spot but they're distributed all over his torso, and by now his scales can mostly stop them and regenerate after a few seconds.

Not being able to catch her is frustrating and the response to that (and to being shot) is to grow BIGGER and FASTER.

(If she looks down, she might notice three rhino-sized animals of an unclear species with human riders come to a halt on a rooftop not far from them.)

Well then. This very clearly isn't working and she doesn't have any clues as to how she's supposed to do this fight. It hurts her pride a little to escalate so dramatically but she doesn't want fight this guy all night long. Her next weapon is a floating crystal. If this doesn't work she'll need to escalate to boss attacks or champion tier weapons.

The crystal hovers in front of her. She pauses to get a good angle. She doesn't want to catch anyone she's not trying to hit with this one so she deliberately drops below him so her over-penetration will be directed into the sky. And then she fires.

For a couple seconds it shoots a wide spread of six beams of different colors but then it converges into a much tighter beam that's still about a meter in diameter. This hits much harder than anything she's used so far and it tracks fast enough that there's no way for him to dodge.

Meanwhile, on the rooftops below:

"He really does turn into a dragon!"

"We can't fight him if he's flying! We should leave before he finishes and remembers he was going after us."

She is escalating. Escalating slowly. Wants to win. Doesn't want to win right away. Sees fight as game. Enjoys game. 

Squint. "Guys, I think she's sandbagging. She's... drawing him out? Letting him grow stronger - no, she doesn't know that's what she's doing... I think she could just kill him if she wanted. But she enjoys fighting."

"We need to be out of here before either of them wins! Bitch, let's go!"

run run gasp for air run some more why can't her bugs recognize a payphone on sight

Lung is flying and engaged with an unknown parahuman. He can't tranquilize him when he's up in the air and also heavily armored, and he can't fight him in the air effectively enough to ground him with his halberd's current loadout. He has to call for reinforcements and this is very frustrating. 

It is frustrating because they have no reinforcements that can reliably take out a flying Lung, short of the attack helicopters which are never approved for use in the city because of the chance of collateral damage the PRT won't be able to blame on the villains. It is also very frustrating because his armor cannot (yet) substitute for an attack helicopter, because of lack of appropriate budgeting and prioritization and safety concerns despite his own programs clearly showing the proposed upgrades to be well within safe parameters.

His report of tonight's incident will point out that he could have reached the scene before Lung was airborne if he'd been allowed to accelerate to approximately 236 mph within the city limits, which is perfectly safe especially with his motorcycle on autopilot.

The beam doesn't quite punch a meter-wide hole all the way through Lung, but it crumples his ribcage and sends him spinning out of control and down to the ground. If she keeps at it, she can kill him before he grows strong enough to ignore it.