One of the reasons why Henry sensei would not let anyone open spar until they reached some level of proficiency and that meant, in most cases, the level of green belt or go-kyu. What we did was practice using real actual karate techniques from basics and kata in a drill type fashion, i.e. drills with one step, three step and five step controlled sparring. We considered it a natural progression to then move to open sparring at the go-kyu level as that pretty much was a good indicator that they could create technique on the fly.
This is pretty much a simplistic description to convey what it is I feel open sparring is and is about for the system of karate, martial arts, I practice and train in but the actual progression to really implement and apply martial principles is a bit more involved but this gives a good idea and a means to pursue it as a model of training and practice for the early kyu's.