So we raided this old cache of my GF's grandpa's stuff, and along with an (apparently, thanks to Reddit found out) a R.A.D. dress dagger, but this interesting Katana.
It's full tang but everything is like, machined metal. Even the details on the handle - it's not wrapped, it's just a metal handle.
It also has a rudimentary blade lock/ release which I've never seen on any other katana ever.
I feel like I read somewhere they mass produced low quality katanas to give to soldier for morale or something?
What's the story here?
That looks like a Type 95 shin guntō. Shin guntō (meaning new military sword) were mass-produced swords issued to Imperial Japanese Army and Navy officers. The Type 95 in particular was intended for NCOs. The hilt, as you mention, is made out of cast metal (either copper or aluminum), designed to resemble the silk wrapping of a traditional katana hilt.
Guntō swords were made in a variety of forges, to varying degrees of quality. Some could be quite decent, whilst others were quite poor. Some officers used older blades with new hilts as well.
This site has some images of these sorts of swords:
http://www.japaneseswordindex.com/military.htm
The purpose was to serve as a symbol of office, and to link the Army with the samurai of Japanese history. One can see how the shin guntō is a departure of the European-influenced kyu guntō that it replaced. The Japanese Empire wanted to harken back to Japanese history - or, really, their warped, propagandized version of Japanese history - and the shin guntō is a sign of that.
