The background story of this Koan
In Buddhism there's a belief in a long chain of different Buddhas who lived in different times of world history. Shakjamuni Buddha was therefore only one of many Buddhas. The Koan refers to Daitsu Chisho, who was seen as an extremely wise Buddha who penetrated the wisdom of the universe. The Chinese version of the Koan tells a bit about Daitsu Chisho.
This background may explains the monks surprise about Seijos answers.
A monk asked Seijo: "I understand that a Buddha who lived before recorded history sat in meditation for ten cycles of existence and could not realize the highest truth, and so could not become fully emancipated. Why was this so?"
Seijo replied: "Your question is self-explanatory."
The monk asked: "Since the Buddha was meditating, why could he not fulfil Buddha-hood?"
Seijo said: "He was not a Buddha."
The original Chinese Goang
Venerable Xingyang Rang:
Because a monk asked, "Great-penetration Wisdom-winning (Daitōng Zhishèng) Buddha sat for ten aeons (kalpas) at a site of the Way yet did not manifest the Buddha Dharma and was not able to accomplish the Buddha Way.
What was he practicing in that time?"
Rang said, "That question is very attentive and appropriate."
The monk said, "Since he indeed sat very much at a site of the Way, why was he not able to accomplish the Buddha Way?"
Rang said, "He did not accomplish Buddhahood."
Traditional Commentaries and .... Poems (Gata)
I will allow his realization, but I will not admit his understanding. When one ignorant attains realization he is a saint. When a saint begins to understand he is ignorant.
Just so is the old barbarian’s knowledge, not so is the old barbarian’s comprehension. If an ordinary man knows he is already is a sage; if a sage comprehends he is already an ordinary man.