In the style I practice, for your shodan grading along with the grading syllabus, other jiuwaza, one must perform a live tanto jiuwaza.And for one's 3rd dan grading you do as of 2nd dan plus a jiuwaza but with a live katana (not full sharpness).
We practice and test with wood tanto and discuss that you pretty much will be getting cut if it were a live blade. The goal is to make sure those cuts are in usually places that are not debilitating such as on the outside of the forearms. I've only practice once with a live blade and didn't like it as the attacks are extra careful. We recently got some rubber practice knives but I have not practiced with them yet. There's also marker pen practice which is a fun way to get the intensity up without worry about accidental slashes/wounds from a live blade.
As for live katana - we'll do partnership kata with them but not jiuwaza.