I'd arrange subtypes as "trait trees". An entry trait that allows its generic use, then several other traits that can be taken after the first is available. They roll off the original power, but unlock new uses . . . and are of course all unavailable without a character knowing the appropriate Secret.
I'd also make Chi-Blocking something as simple as a Secret. "Weak" power characters can take it instead of two traits, or it can be bought with advancements if you have an rp excuse to learn it from a master. Perhaps Chi-Blocking damage will impose a -1 penalty to Physique or bending with each hit, while nudges can be spent to deal additional "damage" to bending only regardless of the original attack target. So they can only drop Physique one point at a time, preventing the fact that it ignores health from being too quickly overpowering, but can eliminate bending more quickly with good rolls. I feel that balances well enough to match the Weak power source.
Now, other martial arts do not need to be Average power either. To be fair, I'm not even convinced bending will be overpowering in the way people seem to think. They have ranged "weapons" and a bunch of unique utility effects, but they aren't giving Thug-like combat bonuses. At least, I don't think they should. Traits - particularly the bonus traits of a Weak character - should be more than enough to represent martial artists in this setting. Especially since they'll be some of the only characters using traditional weapons, and will likely be able to match or even beat most benders in terms of damage because of it. There's no reason a traited out martial artist shouldn't be looking at similar damage and dice pools to most benders.
So that leaves the last and most important question . . . what will bending do!? We need rules for this, because if it's just Physique with some rp effects it hardly fits the Average power rules. We also need to determine the "weapon properties" of each element, such as Lighting ray vs. Water whip vs. Stone blast vs. Air blade.