This study examines the paradoxical interplay between knowledge acquisition and knowledge application in collaborative R&D. Building on the absorptive capacity (AC) framework, we analyze a failed case to implement newly acquired knowledge within a collaborative R&D project. Through a qualitative case study, we find that while homogenization between partners facilitated knowledge acquisition and assimilation (potential AC), it simultaneously constrained the effective application of that knowledge (realized AC). Our findings extend AC theory by elucidating the conditions under which successful knowledge transfer can paradoxically hinder its application—particularly when the transferred knowledge is tacit and novel.