Here's my interpretation:
Yes, they are sparring exercises.
And the above sentence can partly be summarised by :"You're trying too hard. Go with the flow. Let the technique happen. Be in the moment. etc."
However, he builds a 'philosophy' on that which results in ... a specific use of language? The advice I quoted above is useful, but how does one go with the flow? How does one stop trying? Can you learn how to switch 'being in the moment' on/off at will
I think David is trying to discover, analyse, etc. the mindset needed to be succesfull in sparring (and thus actual fighting). And not just for martial reasons, but for ethical, philosophical, ... reasons as well. Since is aikido is supposed to be this compassionate kick ass martial art.