Team 2 wins medium difficulty.
Kankuro and Temari are long-range fighters so as long as they keep their distances they aren't getting punched by Tsunade. If Tsunade decides to punch the ground, Kankuro and Temari can hop from tree to tree (the location is a dense forest.) Shizune's poison cloud can be blown away by Temari's wind, and Katsuyu's acid can be dodged or blown away with wind.
If Shizune uses her poison cloud, it could backfire on her after Temari blows it towards her. A poison cloud provides coverage for Kankuro to slip his puppets into the cloud, and since both members of Team 1 lack sensory abilities, they will be unaware of the puppets' attacks. Tsunade cannot tank puppet attacks since they are laced with poison, and without an antidote she dies. Same with Shizune. Even if Shizune doesn't use her poison cloud, Kankuro can make his own. Katsuyu gets melted by a Fire + Wind combo (Kankuro has Sasori puppet, which has fire jets that were hot enough to melt rock). Not to mention, Kankuro can bind both members of team 2 with chakra strings, restrain them and then finish them off. There are so many options and strategies Team 2 can use to win this battle.