Lu Li was not making a sick joke or fooling others like they were stupid. He was trying to hide his strength and identity.
Now that he had used Shrink Skill, his cover would blow once he used his full strength to attack. Resorting to soul attacks would cause Ji Mengtian and Die Feiyu to have suspicions. However, he had never used Soul Shattering Skill in front of others. There was no way Ji Mengtian could have known.
He also chose not to use Xuan Energy to confuse others. He was physically strong already. How hard could the Soul Pond of a Noble Lord Realm warrior be? Lu Li could crush it relying solely on physical strength.
When he used his full strength to release Soul Shattering Skill, he could even kill Human Sovereign Realm warriors. He hurt Recluse Solar Dragon last time. He would have killed the Noble Lord Realm warrior should he have used Xuan Energy.