Answer 1: Illogical and puzzled.
In this case, "incoherent" refers to a piece of information that is not logically structured or does not follow any logical progression. Even if the speaker understands what he is trying to convey, the listeners are often confused or completely lost in the conversation.
Answer 2: Philip explained that Erkan lived in his own world.
The fact that Erkan lives in his own world helps us understand why he can try to explain something well and yet come across as confusing and illogical to the listeners.