Where I train we refer to whomever is teaching on the mat as sensei. Has nothing to do with rank. I do not hold a dan rank but have led class a couple of times and at those times it was not considered inappropriate by my teachers for other students to refer to me as sensei.
Mostly we only use the title when we are being formal. Even on the mat we generally call the instructor by their first name. It is just how things are done in our dojo. We are not particularly big on tradition in the dojo and etiquette is minimal but we do have a kamidama and we do bow to O'Sensei's picture and to me these things allow us to enjoy some connection with the tradition and history of aikido's founder. We show respect for his legacy by doing these things but nobody is forced to take part. People really do seem to make a bigger deal out of such things than they really need to.