that's usually a casual feat among the great pirates, it's a greeting ritual between equals, separated from physical strength and devil fruit powers.
people can't adjust the power of their haki (without enma anyway), so the sky splitting feat means that luffy's CoC is strong enough to make that kind of of impact, which also means that luffy's CoC is equal to kaido's in power.
still doesn't even come close to roger vs prime whitebeard tho, so there's still room for luffy to grow. but it's kinda disappointing that kaido, big mom and shanks peaked at that level, no wonder why sick whitebeard was still on top.