There is no way the Mysterious Figure is the hardest boss in the Kingdom Hearts franchise. I would allow him to take the stop of the 2nd hardest perhaps, but he's not #1.
The main aspect that makes the Mysterious Figure difficult are his large amount of 1-hp-guarantee and his one 1HKO move that kills you the majority of the time. Plus he leaves little room open for attack, making you dodge for a good 80%-90% of the time. He also has among the toughest clones I've ever seen in any game, even more troublesome than Data Larxene's since his clones do full damage and attack you all at once, while Data Larxene's usually "take turns" or something to that effect. Fortunately, surges make this battle much easier. I would find it very difficult to defeat him without the use of surges.
However, I'd have to say Terra's Lingering Spirit takes the cake of the overall hardest boss. He has a ton of 1-HP guarantee moves, his defense is both extremely high and odd, meaning you need to connect combos to do significant damage. He has a wide range of attacks in general, however his few tricks are what make him very deadly. He can cast a curse on you, preventing you from attacking. Meaning, you'd need to use magic and bring down a bar of his HP to break the curse. He also has an inverse of that curse, preventing you from using magic (healing) and you'd need to use only physical attacks to bring him down. His Keyblade cannon can prove deadly unless you handle it correctly. If he uses it and you're too far away, you can block the cannon, but it will only keep bouncing back at you. After LS launches it, he'll continue attacking again. Since it's not possible to block both the cannon and Terra at once, you're usually dead, or at least guaranteed to be left with 1 HP. Perhaps his most fearsome skill is his skill that screws with your commands. It shuffles all your commands at a fast pace, with three of them being "die" and one of them being "break free". Given he'll start attacking immediately after he uses it, you'll need to dodge him until your commands slow down enough to hit "break free". Your HP drains at a fairly quick pace, often down to 1 HP, while you're locked by this skill. Needless to say, you can't heal during this lock.
There are many more issues, but all in all, Terra's Lingering Spirit is the most difficult optional boss the KH series has received so far. The Mysterious Figure, however, is easily the most difficult on a KH handheld game, possibly coming in 2nd place overall.
