It works fine, but the historical reason (in Japan at least) was likely more of an economic thing, while retaining some of their objectives of what a sword should be able to do, and not intended for performance "advantages."
In fact, most old swords that are made with laminate constructions can bend like taffy compared to a good non-laminate. This was seen as a positive thing in old Japan...you can straighten a bent blade on the field, as long as it doesn't break. In addition, much of the steel created by tatara is not very high quality, but was still important enough to see use. Laminate constructions are a good way to combine lower-grade steel (lower C) and higher grade steel (higher C) into a single blade without causing the edge retention (an important thing to Japanese swords) to dwindle from *significant* carbon migration/diffusion which you can get if you use it in a pattern-welded billet. In addition, the lower potential hardness of the outside helps prevent crack propagation when a sword is not given post-quench stress relief or temper.
That's more of the older side when relating to Japanese blades. Modern stuff often uses moderate to high carbon material for core, sides, and edge (honsanmai is actually 4 parts, not just one piece core-edge with slab sides). In this event, the entire thing can be quite hard and solid, much closer to a single piece of steel in overall hardness (heat treat is also a bit easier to get consistent when these tolerances are close and roughly known).
