Re: 2nd Kyu
Our kyu tests last about 10 minutes. Though you usually also have to take ukemi for another student's test, which means you have to "perform" for about 20 minutes. Your right that the sensei already knows what you are capable of before the test. In my dojo, I've never seen him fail anybody, but I have seen him refuse to let someone present themselves for a test. It's still a bit more than ceremony, and your expected to work on the specific techniques of the test to put on a good show. We have a free practice on Fridays which is mostly used for this type of preparation.