See I always thought he simply let his guard down and didn't expect Squard to do that, because, I mean what kind of son stabs you lol.
So he simply wasn't using COO, or at least that's what I thought. And what I thought Marco was talking about was his physical reflexes weakening to the point where he could not guard like he did with Ace.
Honestly all this stuff is murky because it was written way before Haki was even expanded on so yeah.