I agree that full on sparring is probably rare now-a-days in Wado (maybe it always was?) - Sensei Osaka of SLC was a kickboxer himself so that may have influenced his attitude. For the finals they don't count points unless the head rocks back. Wado was started with the desire to use the sparring/rolling from Jiu Jitsu and make a karate system that fought under a rule set and wasn't as static as Shotokan. They had the right idea, but like many styes and schools it probably has just gotten soft and bullshido'd.
The JIKC Wado dojo in Honolulu went plenty hard back when, now it's Mcdojoized: contracts and bbs handing out flyers at the mall etc.
edited: forget it. I still reckon the full-contact Wado you described is the anomaly. All the Wado I know about in Melbourne at least is points krotty.