I don't see much that's very swordy going on in the video.
What you say is very interesting. Perhaps we are preconditioned about what is "swordy". My training partner in this video is a senior instructor in Kum Do (Korean Sword). He loved the drill.
So many things can change a practice. Assuming that all cuts must be down the torso seems to be in vogue for the larger amount of swordplay we see in Kendo and Samurai Movies. Using padding with shinai allows each practicioner to trade blows - something I just would not waant to do with a real sword and no armour.
In this drill we are using the longer battle swords and no tsuba. The length of the bokken changes things. The lack of a tsuba requires skill to avoid bashing knuckles. I suspect that without a tsuba on a sharp katana, cutting off a thumb, wrist or forearm will end a duel with real swords. It would seriously give advantage during battle.
But this drill is not about the initial strike. It is about capturing "in motion and an element of chaos" the moment when swords lock with force on force. This theme is seen in Japanese art quite often. But how often is it practiced in kata? How much is it practiced in Randori? Does anyone try to isolate the skill and find a way to focus on it under pressure so that a person's level of muscle memory can be tested?
What do you do when swords lock and someone begins to parry? Is your only weapon the sword? Can you instinctively take kuzushi through the sword. Angier Sensei and Okomoto Sensei do this all the time in their sword on sword demonstrations but it is in an ordered technique with an obvious attack that is prearranged. Men cut... etc.
It is also designed to assist the practicioner in working kuzushi through one side of the body and one hand while doing something complimentary with the other hand, i.e. one hand leads the throw and the other hand cuts with the blade in an aiki blend.
It also gives a practicioner permission to accept that kuzushi in itself is success in a fight and the throw is anti-climatic. In real fighting kuzushi alone can create an opening for a strike or cut to end the fight.
It teaches that if you irimi and parry, you need to do it with angles that cancel out the other person's blade on the inside fight. Noticed the time my buddy entered and we had a "mutual slay".
I am sure I could go on about what we learned but I would like to hear from other's experience.