Hi loneoyote... long time no post from me, eh?
A couple of things to think about:
Pain compliance, as well as "fear compliance" (Shock and awe effect, sight of own blood, etc.) is unreliable in a fight. So cutting someone and hoping that he will feel pain or see his own blood and stop fighting is a losing proposition. Generally speaking, it takes a fair amount of time for people to realize when they are cut anyhow.
I can't speak to all of FMA, and I don't want to be critical of other methods or instructors so I won't speak to them. I can say what we do, though (we being those involved with TULISAN Combat Systems). We realize that because pain compliance and fear compliance is unreliable in a fight, we aim to create as much trauma as quickly as possible, especially when knives are concerned. And, you create that truama until the threat has "stopped."
Now, as far as trauma potential is concerned, the predictability of truama potential is also unreliable. So, the idea that "If I cut his bicep, he won't be able to bend his arm a certian way," or "if I cut his hand he will have to let go of the weapon," generally is not something that can be relied on in a fight. Under stress and in the confusion of a fight, you don't know specifically if your cut was deep enough or accurate to sever the tendon, for example.
So, your main job if you are using a knife for defense is to take the fight to the threat and create as much trauma as quickly as possible until the threat has ceased. Cuts to the limbs are done because they are available, and because they open up a center mass attack to vital areas; where truama is created more quickly. Your focus is on creating trauma on the threat while taking into account the tool of the threat to minimize personal damage or injury. But, your focus is not the tool itself. And you keep creating trauma until the threat has stopped.
So, if you cut someone in the forearm and they scream and drop their weapon and stop attacking you, then fine. You stop because the threat has stopped. But, you aren't relying on that as the response, because you can't. You assume, when you are training, that the threat won't stop until he stops breathing. You assume this because if you are using a knife then that means that lethal force is justified, and that person is prepared to kill you; so you have to assume that they won't stop until they have achieved that goal. You can't afford to hope for a better ending. But, if the attacker gives you a better ending (ie. stops before he is killed), then that is a bonus.
This is just our approach, which at this point is proprietary which is why if you noticed I post a lot less then I used too. However, I don't mind giving away tips if I think it'll benefit someone...
Hope that helps,
Paul