Until the patch comes out the only way to punish Upball is a d1(Down Square). Its still good because it gives you some very nice advantage afterward that you could do alot with.
As for his weaknesses, he's not too hot from midrange as long as you don't jump at him or at least be REALLLLLY smart about your jump ins. Other than this, he is a pretty solid character and doesn't really have any blaring weaknesses.
Just know that the way fireball wars work in this game are if YOU hit him with your projectile first than he hits you with a knife, you could throw another fireball and if he throws another knife you'll be able to block his knife and HE will be forced to approach YOU. People are immediately afraid of some fireball characters like Kano but if they realized this they'd be a bit stronger vs them. The only character that this doesn't apply to I think is Noob Saibot because if one of his shadows hits it knocks you down and takes a while for you get back up(and standard shadows aren't duckable).
Try not to jump from mid distance AT ALL if Kano is idle. Good Kano's are always looking out for jump ins to UpBall them. Block Dashing is your friend.
And as for bad matchups. The only character I honestly think Kano has a bad matchup against is Noob Saibot played properly. NoobSaibot's fireball game stuffs Kano's AND when Kano tries to lay on his seriously amazing up close game Noob's keep out with UpKnee and proper shadows to push Kano back make it so most of the battle takes place in midrange for him, and thats where he isn't that great because the lack of a proper mid range normal move/ranged normal low/fast sweep. Even with this said I think the matchup is about 4/6 in Noob's favor. Kano has to take some risks and focus more on whiff punishing UpKnees and downballing shadows from far away.
And no, even though someone mentioned Kano has trouble vs teleporters, that isn't true. It's possible bad players with Kano will only Upball and Knife, but a good Kano player actually absuses teleporters like they don't even exist. He doesn't need his knives and Upball to be amazing. Alot of people don't realize this when they think of Kano.
Also note that after the patch comes out in a few days that UpBall will be as punishable as Mileena's roll. So many of the Kano players that picked him up only for this will drop him, so don't even worry about it.
They wont be nerfing the up ball anytime soon because they JUST buffed it to be like johnny's flip kick in a sense.
Not true. Tom Brady mentioned that they are making it punishable again in the same patch that is making Kung Lao's spin have 90% less pushback.
Hope this helped.