We improve upon the local bound in the depth aspect for sup-norms of newforms on $D^\times$ where $D$ is an indefinite quaternion division algebra over $\Q$. Our sup-norm bound implies a depth-aspect subconvexity bound for $L(1/2, f \times \theta_\chi)$, where $f$ is a newform on $D^\times$ of level $p^n$, and $\theta_\chi$ is an (essentially fixed) automorphic form on $\GL_2$ obtained as the theta lift of a Hecke character $\chi$ on a quadratic field. For the proof, we augment the amplification method with a novel filtration argument and a recent counting result proved by the second-named author to reduce to showing strong quantitative decay of matrix coefficients of local newvectors along compact subsets, which we establish via $p$-adic s...