The third fight of the 35-year-old Scot's comeback after six years out of the ring ended with a unanimous points defeat as Walsh took a comfortable 98-92 97-93 97-93 decision.
It was the third defeat of Harrison's 31-fight career and casts doubt over his future in the sport, while unbeaten Walsh registered his 14th victory to retain his lightly regarded WBO European lightweight belt.
A cut appeared above Walsh's right eye in the opening round as Harrison, the two-time former WBO featherweight champion, made a brisk start as he forced his opponent onto the back foot.
But it was southpaw Walsh, from Norfolk, who enjoyed greater success in the early rounds with a right uppercut in the second and a straight left in the third wobbling the advancing Scot.
It was Harrison's turn to stun his opponent in the fourth with a right hook doing the initial damage, although the follow-up shots were less damaging and Walsh recovered quickly.
The next four rounds followed a similar pattern with Harrison stalking 26-year-old Walsh, who was content to box on the back foot.
The ninth turned into a war of attrition as the rivals traded blows in the centre of the ring with Walsh just about edging the exchanges, and the 10th and final round proved to be a disappointment in comparison.