I really don’t like SAII. Sure, theoretically it scares the other guy into jumping less, but it’s only scary for him if he thinks you’re going to use it. Unfortunately, the only way you can land it that doesn’t involve significant damage reduction is with a random super, and it’s really not one of the better random supers in the game. Almost every character has an air attack that will beat it and some characters have air attacks that they can use on reaction to beat it, especially those characters it’s often considered most useful on, like Ibuki, Twelve, and the twins.
I think the choice between SAI and SAIII largely depends on your skill and to a lesser extent the opponent’s character. A truly excellent Hugo player with SAI is one of the scariest things in the game; any parry or red-parry or dash or clap or walk up or whiffed normal or jump-in could lead to losing half your life bar. While technically a “random” super because you can’t verify into it unless the opponent has messed up or you’ve parried something, it’s one of the scariest in the game. That damage potential and that fear factor can be huge, especially, like I said, if you’re a technically excellent player and the opponent knows it.
I don’t think SAIII’s combo factor really adds a whole lot to Hugo’s game. It’s not like you can combo off crouching forward or standing strong or anything with any range; the only useful things it comboes from are jumping fierce/roundhouse and claps. Sure, it cancels from jabs, but not at max range and it isn’t as easily verifiable as it could be. In picking Hugo I think you have to recognize that you won’t be comboing a whole lot apart from after big opponent mistakes or after parries but instead using powerful single attacks/throws to deal great damage. Hugo has some devastating combos, but since the most damaging ones start with a fierce clap, they’re hard to land except when the opponent has messed up or you’ve parried something.
Anyway, I think SAI fits perfectly with what Hugo is. It’s what I use in the vast majority of cases.