This is based on opinion. Please don't list it on a work's trope example list.
Nightmare Fuel / Samurai Shodown
There are some horrible deaths in the first two installments; when a fierce slash as the final hit of the last round may cut the opponent in half or convert him/her in a fountain of blood. And behind the winner making his/her pose, the corpse of the loser is leaving the stage in a coffin.
Rasetsumaru: Rips the opponent's heart out with his bare hands, then crushes it before their very eyes and begins drinking the flowing blood as they collapse.
Kusaregedo: Drags his opponent off-screen and then eats them alive while you hear screaming. Then he comes back onto the screen and vomits up their skull. If his opponent was Mina, he spits out her bra and panties instead after devouring her.
Enja: Grabs the opponent in a stranglehold and engulfs himself and the opponent in a pillar of flames, incinerating them alive while a silhouette of his full demon form can be seen.
Jubei: Splits his opponent vertically and horizontally.
Suija: Throws the opponent onto the ground, then manipulates the water within their body in order to telekinetically lift them above his head. Then you see him close his hand into a fist, and hear the opponent's death scream in addition to a Sickening "Crunch!". He then leans back, and the opponent's blood begins to rain down upon him as he basks in ecstasy.
Hanzo: Breaks the foe's arms, then their legs, then leaps into the air (shattering their ribcage as they ascend) and piledrives them headfirst into the ground so hard that their skull cracks, killing them due to fractured pieces of bone impaling their brain.
Kyoshiro: Slashes the opponent as Kuroko the judge watches, then summons a flame which blows off the opponent's head and right arm.
Basara: Drags the opponent into a bottomless pit, where we hear the victim's screams as Basara viciously mutilates them until only their disembodied head remains, which is tossed out of the portal as it closes.
Yunfei: Tears out his opponent's soul, then cuts it in half, killing them.
Zankuro: Braces himself with by planting himself firmly on the ground, charges up energy as if he were performing his super, but instead creates a full-screen Sword Beam that completely obliterates the opponent clean into ashes, leaving only their feet.
Some of the Seppukus are bad as well. Kyoshiro is eaten by his own frog; Basara slashes his own throat, rather graphically; Rimururu freezes herself alive; Enja rots into bones...
The old SNK site had an entry on how to make a Gandara, the mid-boss of Samurai Shodown 64. It gives a new meaning to Powered by a Forsaken Child.
Kusaregedo is terrifying in concept alone. In life he was forced to succumb to cannibalism in order to survive the Great Tenmei Famine, but as punishment he returned from the dead as a gaki, or "hungry ghost", cursed with an insatiable desire to eat everyone and everything in sight, but he especially craves children. In his ending, he devours his own daughter. His main weapon is the bone of his right arm; it's not clear if he merely summoned it out of his scope of this license may be available from dead as a gaki, or "hungry ghost", cursed with an insatiable desire to eat everyone and everything in sight, but he especially craves children. In his ending, he devours his own daughter. His main weapon is the bone of his right arm; it's not clear if he merely summoned it out of his arm or if he ate his own arm and gnawed the bone sharp, but given his victory pose where he starts eating himself, the latter is more likely. The developers said themselves they wanted to make a character uglier than both Earthquake and Gen-An. They succeeded.
One of the victory poses of Basara is with Kagaribi's ghost appearing in his arms, but then the ghost converts into bones and dust in front of him, and then Basara screams in pain for the loss unaware that her death was caused by Basara himself.
Decapitations in Samurai Shodown Sen are of particular note, as the victims' headless bodies will spasm and convulse in death while lying on the ground.
The fact that children are engaging in death matches in itself can be very nightmare-inducing. Nakoruru was only 15 when she first debuted, and Suzu, a protagonist of Samurai Showdown Sen, is 14-years-old. These same children within the series are subject to the same horrifying fatalities and brutal death listed above.