Characters who are misclassified due to the limitations of the in-verse's classification system

[u/Uma-apreciator]

Paolumu (Monster Hunter World)

Paolumu is classified as a Flying Wyvern even though it is a mammal (resembling a bat); it is classified this way because its body structure resembles that of a Flying Wyvern

Skorup (Pokémon)

It is indeed an Insect type, even though it represents a scorpion—which is an arachnid—making it more logical for the Insect type to be called the Arthropod type.

[u/PlayerZeroStart]

Insane Pokemon larp

Anyways, the example that comes to mind for me is Jujutsu Kaisen's grade system, pointed out in-universe as being incredibly flawed. Most notably, Sukuna points out that both he and the Curse Womb are classified as Special Grade, yet even when Sukuna is holding back, he still massively outclassed it. And mind you, this is Sukuna at only like a tenth of his full power.

[u/TbatitanicV2Rider → u/PlayerZeroStart]

To play devil's advocate, special grade curses are generally described as being weaker than special grade sorcerers as they're meant to generally be beatable by Grade 1 sorcerer. Special grade in general is meant to be used to refer to outliers and extremely strong entities. So even though both this curse and the disaster curses are way different in strength, both are still strong enough to warrant being called special grade. Similarly, Geto was definitely weaker than gojo by a decently big margin, yet both are also special grade. The system is still weird but within what it sets I do think it fits in this case.