I have no real answer.
But......
To the best of my little knowledge.
In at least one, completely different, swordsmanship style (Chinese jian/gim straight sword)
there is a history of training to use the tassel as a weapon and/or distractor.
It would seem to require just as much training as the actual sword form.
And to use both together............
Otherwise, in the Chinese swords it is decoration or a flash of color that
stays out of the swordsman's way and serves to distract the opponent.
I know less than nothing about Japanese swords,
so I am happy to see your post; to learn that tassels were sometimes placed on Japanese swords.
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A quick web search for "shingunto" turned up this paragraph:
"Shin-gunto swords are sometimes found with a colored tassel (left) attached to the kabuto-gane (hilt buttcap). The officer's rank that carried the sword can be determined from the color of the tassel. Blue/brown tassels were used by company grade officers, red/brown by field grade officers, red/gold tassels for general grade officers. Tassels can be easily switched from sword to sword and reproduction tassels can also be added to WW II vintage swords. A new general grade tassel on a poor quality sword is indicative of a "made-up" story. NCO swords had a leather sword knot (right). Kyu-gunto swords had a ball type corded knot."
from:
http://www.geocities.com/alchemyst/military.htm