Clearly, the bull shark Dharma Form wasn't enough to defeat the Sword Cultivator. Even the strongest body couldn't withstand the constant slashing of the Flying Swords. It had power, but it lacked flexibility, making it hindered at every turn.
Hou Niao feigned attacks from the east to strike west, pretending to aim for the belly while his true target was always the giant shark's head. He also knew that it would be very difficult to kill a Dharma True Body of such size with one strike without finding its weak point, so each attack was a probe to test the reality and illusion of the Phase Formation in the Dharma Form.
The strike to the head wasn't lethal, and the collapse of the Dharma Form was also intentional by Yu Kuohai, who took the opportunity to transform into another kind of Dharma Form—the King Conch.
It was this very transformation that made the rest of the Cang Pirates realize its true nature. Yu Kuohai wasn't a human Cultivator at all, but a Sea Demon!