There are lots of ways to skin the cat, and also sword blades Your diagram is certainly one way, but there are many others. San mai or honsanmai can be done in multiple arrangements, and yes, swords are done that way. if you Mark are referring to one specific way in which a knife is made that has high carbon steel in the center of a billet, with iron completely surrounding it, your point would be valid as you stated above, but i do not know what the point of such construction would be, as it is the high carbon steel that when heated above critical and quenched that creates a hard cutting edge that maintains an edge. Whew, that was a long sentence.