It turns out that the Two Lius actually had a Divinity Transformation level magic treasure hidden as their trump card, and it sounds like it might even be an entry-level artifact with its own Artifact Spirit ancestor...
But thinking about it, it makes sense. Heng Mountain is one of the nine major sects, and these two are proper disciples of a cultivation family. When they go out for training, it's pretty normal for their elders to give them a magic treasure for protection.
No wonder they dared to venture out to exterminate demons from the start. After all, with a magic treasure to back them up, they really weren't afraid at all.
It's understandable for the Two Lius to keep their treasures hidden, but their hiding truly tricked Tie Dan, causing a miscalculation on his part.