This achievement can only be performed in UMK3, I sugest you use 2 controlers (don't need sign in a second profile)
1 - Choose Nightwolf (is the easiest to do Animality in my opinion)
2 - Your opponent (CPU or 2P) doesn't matter, can be anyone.
3 - Win the first round (you)
4 - Lose the second round (for the CPU or 2P)
5 - Win the third round (you again)
6 - When the message "FINISH HIM" appear, just back up all the way., and quickly you need perform "MERCY" (give a second chance to your opponent)
7 - To do "MERCY" you need hold Run buttom (LT - Left Trigger), and press 4 times down, after that release quickly LT)
8 - If you done correctly the "MERCY" message will appear and your opponent will regenerate a little bit of life, just hit him to appear "FINISH HIM" again.
9 - When "FINISH HIM" appear (will be the second time), you need be very close to your opponent and do the Animality.
10 - Nightwolf Animality: quickly press forward, forward, down and down)
If you done this right, Nightwolf will transform and will kill the opponent., and after that the achievement will unlock.