In my opinion, I think it's what each person feels comfortable with. During our last testing session, persons testing for 1st Kyu had tantodori. In our dojo we use wooden weapons and, at least on this test, one of the people testing had a yoko strike slip through their block, and got a really big and nasty hematoma on their noggen, when the blade smacked into their forehead. I don't like to think what a live blade may have done. Maybe a live blade would have made them more aware and precise with their technique, and it wouldn't have happened? Or, would it have happened anyway, and they would have had a serious head wound? One can only speculate. Like I said this was for a Kyu, not a Dan ranking. I haven't seen a Shodan test in my style yet, as I'm still fairly new. For me personally, if and when I get to Shodan testing, I will probably request live blade if we don't already have that requirement. Then again I'm a glutton for punishment, and if I'm going to fail, I want to fail in a spectacular way.