Well she is personally my favorite character, along with Konoka, i really like how her character is evolving, and yet devolving at the same time. If someone read the manga, Setsuna makes very little progress, in fact she gets a little weaker each time.
At the first time she's introduced during the Kyoto Arc, she fought evenly with Tsukiyomi, even beating her during a fight. She was isolated from Konoka, but was certainly extremely powerful.
Around the middle, she gets less screen time in the Festival Arc, but when she fight Evangeline, She tells her "To give up your sword, or your everyday happiness" Meaning she cant protect Konoka by being so friendly with her. By the end of the battle she defeats Eva, willing to give up neither her happiness or her sword. Later on during the arc she is beaten by Chao multiple times, and is attacked by Kataragi and Touko, fighting with them until she is summoned away.
In the latest arc, she shows promise, but is easily beaten by Fate and is forcibly transported away to some unknown location with Asuna, where they make names for themselves as powerful bounty hunters. She is reunited with Konoka, but during her fight with Tsukiyomi, she is beaten rather easily, but was able to avoid getting killed.During the time they spent fighting the megalosembrian heavy troops, she is able to easily defeat them, protecting Konoka at the same time.
My opinion is that, while she is extremely powerful, she lost alot of power after the Kyoto arc, barely able to defeat regular mages and other Shinmeiryuu, while this entire time she was training to get it back, in her battle with Tsukiyomi she showed her again that "She needs to choose between happiness or the sword" .
Thoughts??