I sometimes seriously wonder how some people's minds work...the only thing that was shown in this chapter were two panels with Luffy just saying "Gear Fourth" and while there isn't even the slightest reliable hint to what Gear 4th might do, so many people are complaining about how now Gear 2nd is nerved, that it's a plot hole and whatnot.
In most cases the strongest techs often have the most severe drawbacks. For all we know Luffy might only be able to use it for a limited amount of time and then he might not be able to move for an hour. With other words if Gear 4th wouldn't seal the deal, he would be pretty much dead, hence it would be nothing more than plain stupidity to use it if you have other alternatives. Another possibility is that it might cause a lot of collateral damage, meaning it would be too dangerous to use when there are too many people in the vicinity. You say he could have saved Law, did the thought might occurred to you that he couldn't use it because Law was there? You do not know at all what Gear 4th might do, so how is it possible you could call this a plot hole? Seriously.
As we do not know what Gear 4th does, a possible scenario is that you just said that it's bad writing and a plot hole because Luffy didn't use an attack that could have killed Law earlier to save Law ~_~
Also no one lets their characters use their strongest techs from the get-go. Why? Putting aside that it often would be overkill, that is what really is bad writing. What you call bad writing is what almost every mangaka does as it's plain out boring =/