those are katas/ choreographed drills, it's not sparring so there's no hesitation. Also Katori Shinto Ryu when they show their katas to the public have tendency to adjust their techniques alot so outsiders can't fully copy them, maybe that's why you think he was hesitant ?
It's called "enbu," and yes, observing performances of budo/bugei -- particularly when it's of the oldest extant martial art in Japan, which has been declared an intangible cultural asset -- is enjoyable.
Lucas Henrique, I'd love to hear your exposition on what they were doing wrong. Also, can you tell us when you received your menkyo in this art? (Oh, and see the gentleman dressed in grey coaching them? That's Ōtake Risuke Minamoto-no-Takeyuki, the retired master-teacher of the mainline school. He didn't seem to think it was "really bad.")
Even when you have proper martial arts background, it's properly from different and mainstream styles of iaido like MJER or MSER or simply just Kendo. Calling other styles bad just because they looks very different from what you have learned is a sign of ignorant
