The test doesn't swing quite as quickly as people tend to think, so it is possible to get a few 700+ questions wrong and still be offered additional 700+ questions.
It's also not uncommon for people to experience a big score drop at some point in their studies (and the 2nd test is one of the most common times for this to occur).
Most of the time, this is what's happened when someone's score goes down on the 2nd test despite seeing lots of harder questions:
You learned a bunch of stuff (and did get better!) and so you get some harder questions right, but you may take a bit too long to do so (since you're still getting comfortable with the material). Then, you're offered harder questions, and you spend too much time on them because you studied this! You should be able to answer this correctly now!
You don't, because it really is too hard, and you've also lost time that you have to make up elsewhere, so you try to pick up some time on questions that you do know how to do.
Unfortunately, that leads to careless mistakes, pulling your score down - and getting easier questions wrong hurts your score more than getting harder ones wrong. As you get later in the section, you have to go faster and faster (or you continue the pattern of taking too long on some and then rushing on others to catch up), leading to an eroding scoreline.
By the end of the section, your score has dropped...and the GMAT is a "where you end is what you get" test. So even though, sometime earlier in the section, your score was a lot higher, your final score is where you are at the end of the section.
Go back and look through the data. Is this what happened in your case?
There are some other possibilities discussed in this article:
https://www.manhattangmat.com/blog/inde ... t-wrong-2/Take a look and tell me anything that you think may apply in your case. We can deal with whatever the factors were in your case - we just need to figure out what they are first. :)