'Celestial Venerable Yu' hadn't utilized his full abilities, but similarly, he hadn't either.
Qin Mu's goal was to force 'Celestial Venerable Yu' to utilize his full abilities. He wanted to see if the person behind 'Celestial Venerable Yu' was one of the nine Celestial Venerables from back in the day.
Even if this person wasn't one of the nine Celestial Venerables, Qin Mu would still be able to observe his cultivation attainments through his divine arts.
When Qin Mu defeated the previous 'Celestial Venerable Yu', even in death, that 'Celestial Venerable Yu' hadn't demonstrated his true capabilities because he wasn't willing to reveal his true identity. This 'Celestial Venerable Yu', however, intended to execute his own ultimate arts, something Qin Mu greatly anticipated.