I'm going to give a third variation on this
According to the party mechanics guide, the game checks to see whether any of the enemies will die if Steel Bladed Sword is performed, and none of them will be killed, Odin uses Gunge Lance instead.
This means that it will also be used on enemies who aren't immune to death but would not have been killed by Steel Bladed Sword, which does have anywhere near a 100% success rate. Therefore, Steel Bladed Sword will kill at least one enemy if it is used. I haven't actually tried this, so I can't vouch for it myself.