Go to the "Help" menu and read through engine settings. You can "dumb down" the engine easily enough by limiting the number of plies or "think" time. Begin by turning the engine off (Ctrl-Shift-M) or by the menu. I've added the Engine Off to my top menu line and always turn it off when setting up a new board. (I wish Engine Off could be set as a startup default but it can't in Fritz 13 as far as I can see).
Fritz 12 - Position Setup and Playing Strength
So are you saying to just let the engine calculate lines and then stop in manually to mimick a weaker player?
Seems to me it would make sense to have a way to change the mode to something like friend mode after setting up the board, but you say this can't be done eh?

Speaking for Fritz 13 (which should be nearly the same as 12), you can proceed one of several ways.
You can play in Friend mode. That is supposed to assess your strength and adjust the engine automatically to that level against you. This would presumably become more accurate after you have played several games against the engine.
You can open the Rated Game menu (under the Training tab) and adjust the slider to the Elo strength you want to play against.
You can limit the time that the engine uses to look for a move.
Personally, I never play against the computer because I find human opponents online here. I use it in Game Analysis mode running overnight to look at my games and find errors and better lines - as a training tool. I honestly do not know how effective the settings are when backing them down, nor can it tell you how realistically they imitate human opponents.

I'm not familiar with Fritz 12, so I don't know its capabilities. If you can't figure out how to do it with the Fritz engine, couldn't you just install another free UCI engine that lets you limit its strength? After installing the engine, maybe you could set the engine's strength to a low value, set up your position, then start playing against the engine? If you want to give it a go, I could dig up the links for a few engines to try.
This is a questions about Fritz 12. I know you can set up a position easily enough through the Insert tab - Position setup button. However, it seems when you do this that the engine is playing at its full strength. I cannot play a reasonable game at this level. Is it possible to change the mode say to friend mode and play from the current position?