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For some reason, although on his talk page it had been agreed to consider him a Kenbunshoku Haki user, on his page it still goes by the name of "aura sensing". I have read the objections to substituting the two terms, but I think it is possible to refute them:

1- Kin'emon is able to sense his surroundings, while Kenbunshoku Haki only works with people:

This may not be true. Zoro, at the end of his fight with Daz Bones, clearly managed to feel the "breath" of the falling rocks, and sensed the presence of his sword under the debris; Luffy saw through Hody's Yabusame, and it is unlikely that the Fishman can direct every single drop of water. Perhaps only high-level Haki user can achieve this degree of proficiency, though, just like only Raleigh seems to be the only one who can measure the strength of others with Haki.

2- Kin'emon was able to sense things through his legs and body when they were separated from his head, so it cannot be Kenbunshoku Haki:

There is no reason to believe that Haki resides in one's brain. Aura is emitted by a person's whole body, it is different from thought. It is more like a sense. In any case, Kin'emon had been cut up by Law at the time, which means that they worked as if they had been in one piece, they simply were in different places: hence, it is not far-fetched to assume that his Haki too could work normally.

Since we know that his Devil Fruit is not one that grants navigation-like abilities, it seems to me that creating a whole new ability with similar effects to Kenbunshoku Haki is even more speculation than considering Kin'emon an Observation user.