This quote is from Bruce Lee. I think it means that even if one has no limitation, you can still lose by making the wrong choices (if you can use any move, you can use the wrong one, and your brain has to cycle through more possible moves). I think it implies that even the strongest, most trained people can lose. Is this what Bruce lee meant or am I wrong (or is the logic wrong)?
It depends on whether you go by the spirit of Bruce Lee's philosophy or the letter of this quote. If you read commentaries on what exactly he meant by this quote, such as this one as an example, this will probably yield better understanding, because unfortunately, the wording is ambiguous taken in isolation. It could be read as follows:
using no [X as X] - i.e. Don't think of the way (X) as the way (X), absolutely; and don't think of limitations (X) as limitations (X), absolutely. This reading suggests that we shouldn't be attached to whatever X is, as something completely fixed.
using [not-X as X] - i.e. Consider the absence of a way as being the way; consider the absence of limitations as a limitation. This reading would suggest that we should take the negation of a thing (X) as the thing itself (X), but depending on what X is, such a sentence could range from insightful to nonsensical. In this case, you could read it as The Way is not the Way (which reads Taoist) and the fact that one has no limitations is in itself a limitation (a commentary on the perils of anarchy, for example).
The first reading is the one that appears to be more in line with Bruce Lee's philosophy, but I think the wording is certainly confusing without context.