Any punch has KO potential if it lands right. Holding your hand out straight while someone runs into could knock them out. In this case, it looks like Jones tried to time Machida coming in with a Liddell-style overhand right, but Machida wasn't coming in, he was just zigging and zagging and footworked his way right out of trouble. There are tons of punches like this thrown every fight. If Jones had guessed right and Machida was coming in, sure, it could have knocked him out.