As two individuals whose Martial Realm levels weren't disjointed greatly, Xiao Chen's appearance at the top of the Treasure Gathering Pavilion, along with his decision not to deliberately hide his cultivation, allowed Xuan Yue to sense his cultivation status, which was only a minor realm lower than his.
Although he was shocked by Xiao Chen's strength, the humiliation inflicted on Xuan Qing's Battle Division required him, as the clan leader, to exact revenge.
In the path of martial arts, every step builds a foundation, and there is also the matter of talent. For common genius figures, they could dominate across several minor realms and kill their opponents. Even more so, they could disregard the barrier of a major realm and fight across realms.