Maybe she's carving something very important and she doesn't want anyone else to see it until it's finished. Fuuko would understand this!

[Makes sense to her. If she was carving something special and someone else saw it before it was done then that would ruin the surprise.]

But if the knife being blunt isn't the problem then maybe it's the wrong sort of knife for the job. Fuuko uses a smaller knife when carving smaller sculptures, a big knife would just be too dangerous and very horrible to use for that sort of thing.