For anyone curious: he's holding the sword in what is known as a Mordhau grip. The reason anyone would want to grip a sword by the blade like this is because it moves the point of balance away from one's hands so it can be used like a mace or warhammer. It's particularly useful if one is fighting an armored opponent!
And no, it doesn't cut up the hands; as long as one isn't sliding one's hands up and down the blade, the edge won't have the friction necessary to cut into the skin.
