Wasn't Sephiroth toying around with First Class Soldiers even then?
Also, in Advent Children, Cloud was getting schooled by mere aspects of Sephiroth. Him beating Sephi in their final battle was simply an example of the "Hulking up" routine.
IMO, Cloud beating any Sephiroth is PIS. He lost, only to have the writers state that "He wasn't exerting himself". To rephrase, he was deliberately getting his @ss kicked. LOL.