The sword doesn't directly absorb jutsu like hungry ghost realm it slices the chakra and them absorbs it. If amaterasu is chakra based it can be absorbed. Without the sword his most powerful shark bomb also absorbs chakra. How many months was it since kakashi used it on deidara? In recent times he has used it faster and on smaller(harder to pinpoint) moving objects. Your missing the point that clearly kakashi is smarter then itachi. Every fight he has out smarted the genius uchiha. If he catches one in an illusion with his eyes he becomes unable to move himself and leaves himself open. Its not to his advantage to use genjutsu when he is fighting two or more people. Notice when him and sasuke did their genjutsu fight neither moved, he also didn't move when he used it on naruto during the rescue garra arc. Itachi would not win, get off his ****. He is good but no ninja in naruto has proven to be so powerful that one ninja at their level let alone two could not defeat them. Also itachi only knows he copied 1,000 jutsu he barely knows he has a mangekyou sharingan let alone what his jutsu is. Watch the fight during the rescue garra arc where he hints at having it only.