Big-Lipped Alligator Moment: What exactly was the point of Raiden being in an insane asylum? It doesn't tell us anything about the character or his motivations. If it had an impact on his characterization, like making him more wary of humanity, then it would serve a purpose, but after he escapes it's never, ever brought up again. Additionally, at the end of the episode, Raiden acquires his iconic straw hat, but he doesn't have it at all during season 2.
Jerkass Woobie: Johnny Cage. Sure he's arrogant and confrontational, but watching his career collapse around him is still tragic. Watching his producers insult him and tell him his idea for a TV series is stupid, before pitching that exact same idea to a female actor... you really start to feel for the guy.
Narm: According to viewers who know Japanese, the segments of the Scorpion/Sub-Zero episodes spoken in the language were laughable.
Nightmare Fuel: Cyrax and Sektor's transformation into cyborgs pretty much invokes this
Special Effect Failure: Live-action Mileena's Tarkatan teeth only appear when the scene calls for it. This is especially evident in Legacy II when the camera does show close-ups of her face and only her human teeth are bared.
What an Idiot: Johnny doesn't kill them, but the thieving producers were making the stolen pitch minutes after dismissing Johnny. They did not even bother to check if one of the world's strongest fighters had left the building before they pulled their stunt. Disbelieve all you like, but the guy can fight, and if you can't, robbing him in plain sight is likely going to hurt.