Yet another possiblity is "this is how we do it in aiki" was perhaps just another example of a man seeing the surface of something, and without penetrating to its depths started to "fix" it. After all 8:05 to 8:28 of this clip
does not show a man with an overabundance of skill with the sword.
No argument about Ueshiba seeing the surface and not penetrating the depths. I don't think he wanted to, which is why he merely watched and then stated how he'd do the same thing with aiki. But the aiki he meant was Daito ryu aiki. Ellis writes about this skill and koryu in his Hidden in Plain Sight book. I don't believe it was that common -- hence my comparison for Ueshiba using aiki versus sword arts that didn't have aiki. But, I should have said, people in sword arts that didn't have aiki. While not common, that doesn't mean non existent.