Even if Nick Szabo didn't have anything to do with Bitcoin, I find it very unlikely that he wouldn't know about the core differences between his own system and Bitcoin by 2014.
That's a bit like a mathematician trying damn hard to prove something, proving it for most cases, and then be totally unaware of the proof six months later, relying on his own proof and proving it for all cases. That doesn't sound like it happens very often, especially not for heavily online academics.
Are you sure he wasn't just politely nodding along to the entrepreneur explaining his invention to him?
I think you have the roles backwards. He was the one explaining (at first) how bitcoin wouldn't scale -- couldn't scale -- because the generated value doesn't adjust with the difficulty, when in fact that is fundamental to why bitcoin DOES work and prior schemes did not.
Which is fine. Nick was only just starting to learn about bitcoin at this time. I didn't understand this until much after I was first exposed to bitcoin, tbh. Much of how bitcoin/crypto works, although we take it for granted now, was very non-obvious to people working on ecash-like systems at the time. Bitcoin basically violates every inviolable constraint that cypherpunks had put on digital money systems.