It seems that there are a lot of people who charge their sword way too much. I hardly ever do, with charging for an initial attack against an inactive gun puppy as my main use. There are situations in which it works fine, but there are also situations in which it does not.
1. If it will knock a lumber substantially toward a teammate, then you shouldn't charge your sword.
Lumbers hit very hard. In some cases, they can break a full health shield in a single hit. Without the shield, they can sometimes take 12 lines of health off in a single hit. That hurts.
The balancing factor to that is that it's usually pretty easy not to get hit by a lumber. They have short range and move slowly, so you can tear them up with a gun. They have a long recharge time, even in tier 3, so after they attack once, you can get in several sword hits before they can attack again. They turn slowly, so you can run circles around them and make them miss even from melee range. (If you double back to run in the opposite direction, they'll swing and miss as you go by.)
But you know what makes it a lot harder to dodge a lumber? When one is halfway across the screen, or perhaps even off your screen entirely, then some idiot teammate knocks it right next to you as it attacks, and it smashes you before you have a chance to react. Don't do that to your teammates.
2. If you get hit while charging your sword, then you probably shouldn't have been charging your sword.
There are a handful of exceptions for when you really need to apply a condition to something. But you can't block while charging your sword, and that often means you get hit if you're in danger. If you're in danger, it's usually also better to just hack away at the mobs that are nearby rather than to do no damage while charging your sword.
Don't get me wrong. It's not that charging your sword is intrinsically bad. But like every other type of attack in the game, it can be misused. These are the two examples that I see a lot.
It's true. Pros kill teammates on purpose to get extra heat and finish whatever it is their crafting to sell to the AH.
Reason 1 in OP is what pros use to knock that extra life out of your lesser teammates. Sometimes it's with a Nitronome, other times with a Cold Iron Vanquisher. Lumbers soften the team up, and that'll lead to more deaths further in the depth.
Other ways Pros will kill you is through shooting explosive blocks while you're nearby one, activating missiles and switches in Ironclaw Munitions, and pretending like they're helping when they're using a weapon that is dealing the least amount of damage possible (using a Mega Magnus on a maximized Lichen Cluster deals only 12 or so health. If it gets stunned, hey more to it).
The objective of these pros is to obtain 30% of the other 3 members' total heat. The further you are in the Depth, the more heat you'll have. That's when they'll kill ya, during that last team battle.
I have 7 friends who are complete strangers to each-other, and this is what they try to do every day. It's a whole different level of gameplay, mind you it's a jerk gameplay, but still challenging all the same :/