It should be a sign that Luffy begins to step on the realm of the very strongest. But the portrayal of power, the build-up in panels, reaction of other warriors, is subpar compared to other instances especially WB vs Shanks.
This is due to:
- Luffy defeated in oneshot at the first match against Kaidou, and then defeated again and fell from Onigashima. So it feels asspullish. The depiction of power progression is dragging, not efficient. If Oda wanna depict Luffy being this strong since this moment, Oda should make it gradual and set a higher base of Luffy's powerlevel from the start in order to make 1026 feels earned.
- Oda didnt portray how Luffy's mental and internal effort to achieve this. Even early Toriko received much better internal process than this by mental image of Toriko meeting the demons, HxH chars also got better internal depiction. Oda should show Luffy's creative mind process, like him walking inside his own mind and found some personification of his haki or devil fruit or find a metaphor to his powers appearing as swirling branches of energy he can manipulate and apply to his body, or as a fantasy river which he previously can only drink a little bit of it but then he found a way to bathe in the river along his realization of figuring out, etc
- the reaction from others are also subpar. No one fainted, no one portrays the strength just like how Marco and Jozu commenting on Shanks (Marco and Yamato should comment about this clash instead, explaining their powerlevel clash had reached levels beyond what Marco and Yamato can imagine, from her-him and the rest. Reminding Marco of Red-Hair and making Yamato also asked about Red Hair's power and story, a prelude to Shanks-BB arc), Zoro-Sanji-King-Queen should recognize the powerlevel explosion and hype both Luffy and Kaidou up. "Your little captain made WSC serious? He's an impossible threat now. I should finish you right now and ambush him or else he may do something unprecedented" or something.
- the narrative significance are subpar. If there are flashbacks containing the significance of Conqueror Haki users in the past or some bigshot noticing AdvCoC clash like Imu noticing that a new conqueror had hatched from its cocoons, linking Sky-Splitters with Joy Boy and Inherited Will and Joy Boy and Lost History, it'll have more weight