well, first off, chi kung or not, anyone can lose a fight regardless of skill and ability.

demonstration chi Kung feats are just that, for demonstration.

The effect of Chi kung in context to actual fighting is in the ability to recover quickly and to maintain a constant and natural breathing rythym while engaged in an altercation, thereby increasing stamina and endurance while fighting.

It does not give you super powers but it does improve your awareness of your surroundings, your ability to recover quickly from strikes and as well it serves to fortify ones "will" to go on.
It also allows you to focus on specific areas of your own body to induce healing qualities via increased oxygen supply in the blood to an injured area.

So, in the case of the practitioner who was beaten, he was beaten in a fight. A fight is not a demonstration of phenomenon associated with Chi kung practice, or on the lighter side "parlour tricks".

Everything in the proper context eh?

peace

Kung Lek