The only thing that happens when you put your sword away is that it adds properties to his sword moves(it glows red during the move) and you can gain health. Like what
@HorseSense said, you can't do certain moves and also some moves turn into some other shit like helicopter dragonfly makes you do a jumping squat.
He also has two little nigger daggers he uses that you can still use some moves even with it sheathed.
Here is Phil fucking up a combo(purposely?) to showcase some Yoshi nerf for his Flash move (where he puts his sword up vertically against his chest really fast).
View attachment 5777407
Of course he's a fucking retard who doesn't put his sword away during the d+2,2 (hold back) when does use Flash, so the final sword hit doesn't get powered up in red and loses a lot of range.