I do not believe Ueshiba would have to react differently to a knife attack than he does in this video.
That's why I think his is the more martial demonstration.
This made me curious so I decided I wanted to compare and thankfully youtube provided me with the evidence!
Ueshiba performing tanto dori kote gaeshi https://www.youtube.com/watch?v=Fad-uQ5kIzk
Ueshiba performing kote gaeshi https://www.youtube.com/watch?v=qVmOI4AY6d8
From what I can see his distance from uke does not alter greatly between attacks; however fascinatingly he brings uke's hand back further towards uke's body in the tanto version which would force uke to move his head to avoid being cut with his own knife thus taking his posture both through the wrist lock and knife.
But does this prove greater martial effectiveness? For one uke telegraphs the attack very obviously and doesn't conceal the weapon so Ueshiba can more easily judge the distance.
I couldn't find any videos on youtube of Tissier performing tanto dori so I can't compare his techniques.