Q:

Did Avengers: Infinity War ignore the locations/distances set in Guardians of the Galaxy?

I know the Marvel Cinematic Universe likes to keep the locations vague to avoid questions like this, but it's been established by director James Gunn that the events of the Guardians of the Galaxy take place in the Andromeda Galaxy, not our local Milky Way. That suggests that locations such as Knowhere, Xandar, and Titan are in the Andromeda Galaxy, 2.5 million light-years away from the Milky Way. (For comparison, that's approximately 25 times the 100,000-light-year diameter of the Milky Way.)
Given that, we seem to have a scramble of locations in Infinity War:

The Asgardian refugee vessel(s), which left the ruins of Asgard (location unspecified) and from which Heimdall sent Hulk to Earth.
Thanos then dispatches his minions to Earth.
The Guardians, who are nominally in Andromeda, respond to the distress call from the Asgardian refugees and pick up Thor.
Some Guardians go to Knowhere in the Benatar (the Milano's successor), while others go to Nidavellir via a pod. (Isn't Nidavellir supposed to be in its own realm?)
Tony Stark, Peter Parker, and Doctor Strange wind up on Titan after a what seems like a relatively short trip.
Thor and Thanos wind up on Earth, but their instantaneous travel is explained by either bifrost powers or the Space Stone.

Did Infinity War directors Anthony and Joe Russo retcon James Gunn's distinction between the two galaxies, or did they simply fuzz everything over?
Is there an MCU or out-of-universe answer?

A:

Did Infinity War directors Anthony and Joe Russo retcon James Gunn's distinction between the two galaxies, or did they simply fuzz everything over?

Neither. As far as we can tell, James Gunn’s Milky Way/Andromeda distinction* still holds as well as it ever did during Avengers: Infinity War.
Abundant spoilers ahead!
We don’t get much more accurate in the movie than the “SPACE” caption early on, but we can probably assume that all of the movie’s locations except for Earth are in the Andromeda galaxy:

While the Asgardian ship originated on Asgard, the location of which is super-unclear, it left when Asgard was destroyed at the end of Thor: Ragnarok. Given that the Guardians picked up its distress call, it was presumably in Andromeda when it was attacked by Thanos and co. Given that Thor was taking his people to Earth, it was presumably on the way there already.
I don’t think we’re ever told that Nidavellir is in its own “realm”, like Asgard, so given that Thor, Rocket and Groot can reach it via one of the Milano’s pods, we can assume it’s in Andromeda too, like Knowhere.

As we saw in Guardians of the Galaxy, ships like the Milano can apparently travel to a bunch of Andromeda galaxy locations in fairly short order, so that takes care of most of the Guardians’ travel.
As you say, all of Thanos’s journeys in the movie (including his trip to Vormir, wherever the hell that is) are done using the Space Stone’s presumably-instantaneous teleportation powers, so they’re fine. Both the Hulk’s journey from the Asgardian ship, and Thor’s trip to earth with Rocket and Groot, are via the presumably-near-instantaneous Bifrost, so they’re cool too.
The only other journeys between the Milky Way and Andromeda are made by Thanos’s minions — from the Asgardian wreckage to Earth, and then Ebony Maw heading back towards Titan with Tony, Peter and Stephen along for the ride.
We know from the first Guardians movie that the Milano picked up Peter Quill on Earth in 1988, and presumably made it back to Andromeda without it taking years to do so, so it seems reasonable that Team Thanos’s big donut ships can do the journey really quickly. As Maw’s leaves earth, we see it shoot off into some sort of lightning effect, so I guess he turned on the hyperdrive or whatever at that point.
Out-of-universe, the movies have almost always been pretty vague about the distances and journey times involved in space travel, because they’re not really about that. This isn’t Star Trek, and we’re not calculating warp factors: all the ships can get to where they need to be, quickly enough for the story to proceed.

* Which, given that it’s not mentioned in any of the movies, is strictly-speaking non-canon.

