I think we're mixing apples and oranges here.
One camp is working from the premise that Neo's powers are that of a human mind manipulating a virtual world against virtual humans, and thus his powers would only work on simulations/programs and not on non-program metas.
The other is working from the premise that since Neo's abilities within the Matrix would transfer over seemlessly to the neutral KMC environment via the Cross Genre rules his powers would still function in the same manner as they were portrayed to work within the Matrix, regardless of his opponent or locale.
That's where the disconnect is.
The latter is the correct interpretation of the rule, however, not the former. Per Cross Genre Rules, Neo would be able to manipulate the battlefield and his opponents just as he was depicted as doing in the films, regardless of his opponents native universe or medium. Just as Flash can steal the momentum of any opponent regardless of the fact that their native universe does not have a speedforce, Neo can manipulate the reality around him, and his opponents, just as he does his native Matrix.
Whether his opposition has the capacity to withstand this manipulation or not would be up for discussion.
Personally, I think someone like Superman, for example, has shown enough durability in his career that a strong argument could be made that he'd be able to resist being torn apart in that manner, and a character like Thanos has on panel feats showing him resisting reality manipulation while traversing dimensions.
Someone like Ironman, however, who is a regular human in an armor, is likely getting blown up like Smith did.