User blog comment:Zolnir/Flaw in Tournament Setup/@comment-5426254-20160318001153/@comment-11188061-20160318035814

Those robots aren't 'referees'. They don't have their own mind and are don't do anything until they're given orders. They might as well be janitors. And Ironwood totally has the budget to do anything he wants. It's just that for whatever reason, he apparently decided not to put Huntsman as part of his 'security'.

So in general, Xian Xia characters have a power called 'Inner Strength' that is used to strike your enemies (imbue it in your fists or weapons etc) or protect their wellbeing. Unlike Aura where it absolutely protects you until it's depleted, Inner Strength is more like an extra layer of protection which you can freely manipulate around your body like water. Without depleting the enemy's Inner Strength reserves, fighters can pierce their defenses as long as their attacks exceeds the enemy's layer of protection. Inner Strength are often differentiated by levels, and the higher it is the more powerful the fighter is. Very often a single level can make all the differences between 2 fighters, and there are Tiers where the difference of power gap is said to be like night and day, sky and land, even though they're verbally just a level of difference.

Of course, a person's Body Strength has to be factored in as well. Very often the MC in Xian Xia will upgrade both their Inner and Body Strength, making it so that their body is so tough that even weapons cannot cut through their skin.

In the stories, the tournaments are almost exactly like RWBY's, where all moves are allowed and the only rule (most of the time) is that the combatants are not allowed to kill their opponents. Otherwise you can break someone's spine or crush their bones or beat them so hard in the head that they become idiots yada yada...

And yes, the lethal attack is stopped before it connects with the enemy. Very often the referee will shout a verbal warning while diving in at the same time (depending on how serious the situation is), and either disrupt/cancel the enemy's attack or defend the victim by taking the full brunt of the attack. Since these referees are usually 3 or 4 Tiers above the participants, it is normally impossible for these attacks to kill their target unless they have some special properties like poison or whatever.

This should be even easier to do in RWBY because Aura is so convenient.