Board Thread:M.U.G.E.N Help/@comment-25374698-20150125005011/@comment-3495717-20150125112809

Expanding on Question's very insightful post, Mugen Story Mode is capable of producing such scripted battles, but given how long it may seem to make stories and whatnot, it's probably better suited for full games.

Default MUGEN on its own can't do what you're requesting, sadly.