You have to beat the game to unlock Shirt 00.
After beating the game watch the entire credits and save, after that you will be able to play the Bitter Difficulty.
We all know that free fights can be frustrating, but here are some tips that will definitely help:
1) Only attract one or two enemies at a time. The more enemies you have to take on at once, the less likely you are to survive.
2) Do NOT run around too much while fighting small groups, as you may attract even larger groups in the process.
3) Once you receive the Mk-III beam katana, your side stance charged beam attack becomes a one hit kill on any free fight enemies. Spam this attack, and it will help you get through enemies without the trouble of having to defend constantly.
4) Always be targeting. The moment you stop targeting with the Z button, you stop automatically defending and leave yourself completely open to attack. Remember, in a free fight, you will go down after one hit. ALWAYS BE DEFENDING.
5) Take out the gunners first. Of all the enemy types, the gunner (Uzi wielders especially) are the most likely to cause you to slip up. One bullet is enough to kill you in a free fight, and they fire about 5 rounds per minute. Take them out first, and defeating melee enemies will become that much easier.
Always be sure to attack when the enemy is easy to get.
Example the first ranked guy is easy to get when he hits the ground with his massive sword.