When do S-Crafts and S-Break become part of the tutorial?

They are introduced as Kurt's battle begins. Use them together with the mechanics you practiced in the earlier tutorial encounters.

What should I do if Kurt knocks someone out during rage?

Use an item to revive the fallen character, or keep healing to prevent a knockout. Kurt has 1 HP in this phase, so take an opportunity to attack and finish the fight.

Trails in the Sky 2nd Chapter: How to Beat Kurt

Beat Kurt at Balstar Channel

Prepare Estelle and Anelace for Kurt at Balstar Channel, use S-Crafts and S-Break, and survive his final rage attack.

Trails in the Sky 2nd Chapter · Game media

Use S-Crafts, then finish his rage phase

Use S-Crafts and S-Break against Kurt, applying the combat mechanics from the preceding tutorial battles.

When his health is almost depleted, Kurt enters rage mode and can knock out your characters. Keep them healed or revive fallen allies with items. He has only 1 HP during rage, so land an attack when you can to end the battle.

Prepare Estelle and Anelace

Synthesize Mind 1 and Shield 1 Quartz. Equip Mind 1 on Estelle and Shield 1 on Anelace, then head toward the Le Locle Training Grounds to meet Kurt along the way.
Talk to Kurt so he accompanies you to the end of the path, then select Balstar Channel from the fast travel menu.
Progress through Balstar Channel's mandatory opening battles to learn the basic combat mechanics.
Use the healing crystal at the start of the final area's corridor before continuing deeper to Kurt.

Handle the tutorial fight and final retaliation

When do S-Crafts and S-Break become part of the tutorial?: They are introduced as Kurt's battle begins. Use them together with the mechanics you practiced in the earlier tutorial encounters.
What should I do if Kurt knocks someone out during rage?: Use an item to revive the fallen character, or keep healing to prevent a knockout. Kurt has 1 HP in this phase, so take an opportunity to attack and finish the fight.