The hitboxes are already relatively small and difficult to hit, especially when both parties get in close and are determined (for some reason) to not be shanked - and given that Kenjutsu will be largely Combo-based, I think it's safe to assume that it won't be lacking in terms of tactical complexity. At most, freedom of movement should be incentivized further when making your attacks, as the current demo shows that being too flashy/anime in execution will easily leave you wide open to counters.
The bigger problem lies in how it'll end up fitting into the overall Tempo of combat, making it too slow or too fast could leave it staggeringly far ahead or behind the competition, and this is compounded by the fact that...unfortunately, Kenjutsu is a bit of a one-trick-pony in a game like this; You either get in close and overwhelm your opponent with pressure, or you die - simple as that. It's going to be very difficult balancing the damage, timing and distance with such limited design space, and I highly doubt anyone is going to be able to go strictly Kenjutsu. More than likely, it'll end up being used as an opener or finisher, tying into Jutsus rather than directly opposing them; If we looked at it more as a sidearm than a primary method of combat, it could probably find a nice little niche - hell, even more so if it was designed to take less resources than other Jutsu, thereby ensuring its place as a reliable last-resort.
This could even take on a sort of Magikarp-like role, being weaker than most in the beginning, but transforming into a very powerful high-end style if supported with ample physical training and chakra control for the appropriate levels of speed and damage/jutsu-disruption - I think it ending up as the Gyarados of SLO could be pretty cool.
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