I have a blade based "lawnmower" I use for Farmer Gascoigne, it can dispatch all of the farmers on the level even with their scythe attack. All it has are blades attached to rotators on 1x blocks which are braced to the main vehicle. What kind of problem are you having the blades?
I've replicated your machine and duplicated your results. I don't think they are excessively weak. I think they break when the attachment post detaches from the block, which can happen when hitting a guard into another guard. Blades don't appear to actually slice through the guards. I'm not sure how damage is handled but there is definitely a collision event between the blades and guards, and collision events between guards. If the collisions happen just right then the blade slows down enough to break from the attachment point
probably blades work as any other weapon, where they have a preset damage when they hit something at certain speed. i suppose its this way because, well, its the simplest and because as you said it cant slice.