downgrade cluster functional level
After doing some research, it looks like you can't downgrade cluster functional levels, nor can you live migrate instances from 2016 to 2012 anyways. I would suggest using server 2016 instead of a 2012 to get this job done. You'd have to put a lot of work into using the wrong tool for the job if you were to try to use 2012 for this, even if downgrading was supported.