It came after Osaka awkwardly predicted she was about to drop out of the top-10 in the WTA Rankings after an Aussie interviewer butchered a suggestion that she could defend her Australian title and steal the No. 1 ranking back from Aussie Ash Barty.
The World No. 4 politely had to say that with her 5496 ranking points, she couldn't catch world No. 1 Barty, who is carrying 8017 points, even if she did win another major trophy in Melbourne.
"Ash is like 2000 points ahead of me and I have to defend this. I'm like, 'Yo, I'm going to drop out of the top 10 for real'," Osaka said.
She now sits on the edge of life outside the top ten. But the ratings upset wasn't even the most awkward aspect of the defeat for Osaka.
The 22-year-old's dramatic downfall was sharply exposed by a painful handshake with Gauff at the net just a few months after having to console the American when she eliminated her easily at the US Open.
The gulf between the two players in Melbourne could not have been more obvious than the moment Osaka appeared to pull out of a handshake with Gauff, after the teenager approached her at the net with an outstretched hand.
When Gauff and Osaka met five months ago in New York, also in round three, then-world No. 1 Osaka crushed the tearful and overawed teenager 6-3, 6-0 in a little over an hour.
That first clash was memorable also for what happened afterwards, when the teenager cried and Osaka consoled her, before Osaka herself began welling up.
This time Osaka awkwardly put an arm around Gauff after ignoring her offered hand and had to stand there as Gauff took pity on her and tried to console her.
"Now it's going to be Coco Gauff consoling Osaka," American tennis legend John McEnroe said.
Osaka admitted it was one of her worst performances when she raced to her press conference just minutes after the match, still emotional from her "implosion".
After hitting 30 unforced errors to Gauff's 6 while both players shared 17 clean winners, Osaka said it was a night when "nothing went right" for her.
"This one hurts a little bit more," Osaka said.
"I love her, but I don't like this feeling of losing to her.
"I feel bad for my entire team. We came here to win the tournament and I'm sort of like the vessel that everyone's hard work goes into and I let everyone down.
"Also my mum and dad are here this week, so that makes it hurt a little bit more."
She said she simply could not kick herself back into gear.
"You can tell I don't know how to deal with that," she said after confessing she couldn't figure out how to break Gauff down.
"It was one of those days where I couldn't do anything right.
"I don't really have a champion mentality yet, which is someone who can win even when you don't play your best. I don't have that yet."
The tennis world agreed.
Teenager Gauff, who spent time training with Serena Williams in the off-season, had said she would be less nervous and more aggressive when confronting Osaka for a second time.
And so it proved as they rattled through the first five games in barely 15 minutes at the 15,000-capacity Rod Laver Arena.
Osaka, a relative veteran at age 22, fired into the net to drop serve in game eight and then racked up more unforced errors in gifting Gauff the first set in 32 minutes.
"Come on!" shouted Gauff, ranked 67 but fast making a name for herself as the most exciting prospect in women's tennis.
The young American carried the momentum into the first game of the second set, breaking a subdued and rattled Osaka, a two-time Grand Slam champion.
The Japanese broke back for 1-1 when Gauff volleyed into the net, but it was a rare mistake by the American and she broke once more, before serving for the match at 5-4.
The nerveless teenager clinched victory on the first match point when Osaka fired into the net.
Gauff's ice-cool demeanour just made Osaka's meltdown look all the more ugly.
