Having spent 9 years as a Personnel Officer in the Navy, I can tell you that the Sugar Coat memo is likely a fraud. In that memo, Killian supposedly writes to himself that hes going to give Bush no marks for the period, but Killian had no choice. Thats the way fitreps work.
When an officer is away from his permanent duty station for a significant period portion of the reporting period, the reporting senior must submit a "not observed" report. Anything else would be conjecture. A Not Observed reports means that the Commanding Officer is limited in what he can write about. He cannot characterize the quality of the officers service during the period, but only state facts like the officers rank, his primary duty, his qualifications, and the reason for a not observed reportless than 90 days observed.
Additionally, reporting seniors may not use information from another reporting senior. Killian would have known this, so he would not have written "I don't have any feedback." It wouldn't have mattered if had gotten a daily report from Bushs CO in Alabama--he couldn't have used any of it a Fitness Report.
In this case, the Alabama unit would have submitted a "concurrent" report, meaning it covers a period also covered by a "regular" report. This concurrent report would contain the characterization of Bushs service during the period. The Texas squadron would submit the "regular" report, marked "Not Observed" and directing interested parties to the Alabama unit's concurrent report.
Dull, yes. But I supervised the FitRep process for many years, and it's pretty much the same across the services.