Its probably the way they have set up the online in this wonkadoo P2P system, and couldntr spare a few bucks to get some good servers for everyone. Instead of the game glitching and indicators not showing up in time if someone has a bad connection, I think it forces the game to slow down to the speed of the slowest person in the match. Which makes it hard to get the right timings for certain moves, parries and especially the obsolete deflect moves due to erratic timing throwing off muscle memory.
Thats just what I think is happening, but I dont know too much about this stuff... Eitherway its annoying and pretty gamebreaking when everyone slows down to a pace where fast attacks become heavy attacks.