Kakashi figured it out. Itachi is smarter than Kakashi. Itachi is probably the third smartest shinobi in the series, Minato and Madara are smarter.Again, what makes you think Itachi will figure out that 5 second interval so fast? And like i said, after the first one Itachi would already be pretty far away from Nagato, for him to get close enough and use the sword again (which i doubt would happen because Itachi is not the type to spam) would take some time.
And there is no proof that the sword can seal Chibaku tenesi, if it could why didn't Itachi do it? !!!!!!!!!!!!
Itachi used the oppurtunity to reply to naruto and demonstrate that every jutsu has a weakness, that is why he commanded Naruto and Bee what to do and teached naruto a lesson about keeping his head cool in similar situations.