Tie Mu Zhen can just use his Raider Tool and instantly take Oersted powers and removing it from him, as seen in here with him doing it on someone else, and logging them off from the game world - https://imgur.com/a/4yo8Qsf
I see, then just 1 hit from TMZ should seal the deal as his powers will get stolen while removing the Player's consciousness from a game, but TMZ's a player from a VRMMORPG so I don't know how this situation would work out
Otherwise he can pretty much play the long range game with his bones or attack underground with it while Oersted has to use his techniques to play the long-range game, otherwise he has standard meelee range
If Tie Mu Zhen tries to rangesnipe Oersted, then Oersted would probably use moon down on him to put him to sleep. The sleep isn't permenant, but it should last long enough for Oersted to kill him while he's sleeping and defenceless.
And although this move won't do any damage, it'll stop Oersted movement upon hit which can also chase him and make huge spikes upon contact with the ground - https://imgur.com/a/mhUDCR7
Which should still be able to take away Oersted's power as there's no mention of changes not enabling him to take away powers at that time and you can see him stealing someone's Powers in here - https://imgur.com/a/4yo8Qsf
And the ability that he stole from that dude is Monkey God Armor, so he can increase his Agility and Strength by 10 times (although unlikely to be used since he's never shown to use the MGA since he hasn't been shown in much fights) - https://imgur.com/a/tz4Eg9g
And Oersted's Profile states that this (Oersted's most powerful moves take a few seconds to charge), so he won't be using Moon Down at this rate as he'll be pressured to move around
And I forgot that TMZ is superior to Characters who can easily deal with the Blood Shura who is likely equal to the person who performed the feat that gave them their Stats as they're both Bosses of their respective Floors
Oersted has Standard melee range otherwise several dozens of meters with his techniques, so he'll have to use his techniques to cover the gap up in which he'll be halted to do so as he'll have to take a few seconds to use some of his most powerful moves
Looks like some of his moves requires him to go near his opponents to work: Cut One Way, V Shine, Plus Link, Hammer Power, Mirror Drive, Spindle
While I'm guessing the other moves require time to charge so he can do long-range, which can be avoided although the same could be said to TMZ's but he doesn't need to really take a long time to charge them and he can just end it in 1 hit
Oersted can still win if Moon Down indeed hits and if he can damage TMZ long enough or use Death Trail but that takes time to charge and it's probably a technique that requires him to get close so it's probably not possible for him to hit it by the time TMZ wakes up but Moon Down doesn't last long enough like you said (an unknown amount of time), so TMZ should be able to wake up sooner or with just 1 hit since you said it's a move that will put him to sleep, so he'll be awake with just 1 hit from Oersted, or he can just use the Monkey God Armor while doing long-range attacks which should protect him from attacks (although unlikely to be used since he's never shown to use the MGA since he hasn't been shown in much fights). Then he can just keep the bombardment of long-range attacks coming then he'll seal the deal with 1 hit
Moon Down is mind-based sleep manip, Tie doesn't wake up until the effects of Moon Down has worn off since he doesn't resist it. It lasts long enough for Oersted to get into CQC range and slash him multiple times. Or, if he's immobilised, fire off multiple piercing wind blades/charge up a Death Trail to win the fight. I can't see a way where Tie wins by doing his bone rangespam.
How long does it last? How does it even work? Does he have to scream or attack his mind or something? What's the range for it? Might as well show a video of him using it along with statements of what it does. Is Moon Down even his first move for long-range? He has other long-range moves so he would probably use them instead of just Moon Down.
How long does his Death Trail even take to charge? Where's the context in it for it to cause enemies to die in a single hit. If it's literally even an attack that can cause death in one hit, has he even used it on the Final Boss, along with the Moon Down move so he could put him to sleep and just be done with it - https://youtu.be/AqafYDZNZDQ
The way I see this match goes at the start, Oersted is far away and need to get close with TMZ for CQC or use any of his long-range attacks (in which we don't know which one he'll use as he's an RPG Character and for all we know he'll probably go for CQC) while Tie Mu Zhen will use his needle-spam or bone-spam and the Monkey God Armor for long-range attack and protection and stat amps while Oersted will have to deal with the needles chasing after him, in which if he tries to stop moving to use his other moves, like Moon Down or attack TMZ with his long-range attacks (some of which probably needs time to charge), will disable his movements to move if he's hit for an unknown period of time - https://imgur.com/a/mhUDCR7
Or the bones which will literally seal the deal if he gets pierced with it as he'll have his powers taken away.
Even if Moon Down will take effect, he'll still have to dodge the needles so there's no time for him to charge the Death Trail or use any of his other long-range attacks to attack while TMZ will get up (which is even unknown to how long the sleeping will last) later, and he also has the MGA for extra layer of protection so more time for him to wake up while Oersted is either being chased by the needles or is already immobile
I guess I'll summarize the match in here based on what I think it concludes into
tl;dr - Tie Mu Zhen wins via being able to take away Oersted's power if just one of his bone spam attacks can connect, in which he can attack from afar while Oersted has to get near for him to fight closely or use a few techniques from afar to do long-range attacks (TMZ can use the Monkey God Armor so he'll have extra defence) and while he can force TMZ to sleep there'll be the needle spam that he'll have to deal with so TMZ will have time to wake up. Needle spam which can lock onto the target to pretty much render Oersted immobile so he won't be able to move which will pretty much seal the deal as TMZ can then take away his powers effortlessly.