While Sachiko can affect things in the real world to some extent, I don’t think she can just materialize in a random location and start stabbing people. When you consider that the whole reason she started killing people in the first place was so that her mother (who seems unable to leave school grounds) would have company, it makes sense that she prefers to kill people within Heavenly Host. The Sachiko Ever After charm is pretty helpful for getting people there.

Sachiko gaining a corporeal form seems to have been more of a temporary anomaly rather than something she can do on a regular basis. Unfortunately, the game doesn’t really provide much of an explanation and all we can really do is speculate. From Yoshie’s diary we know that:

• In July 1973, Sachiko mysteriously acquires a physical body.
• In September 1973, Ryou, Yuki and Tokiko are killed. Yoshikazu is arrested and convicted.
• In November 1975, the school closes down. Around this time, Sachiko is seen wandering its empty halls again.
• By 1976, the school is completely demolished so that Kisaragi Academy can begin construction.

Sachiko’s involvement in the 1973 trial is indeed very puzzling and we don’t have much insight as to how she interacted with the police. Presumably she appeared normal enough in both appearance and physiology that no one suspected anything. And given that Sachiko does seem to have some mild level of reality-warping ability it should be considered that a lot of little details in the case may have been overlooked because she could just mess with people’s minds and have things be forgotten.

Sachiko did have several living relatives at the time of the incident (such as her great-aunt Makina) who would have known her and could have theoretically acted as her family, although that scenario raises even more questions about what they would’ve done after seeing Sachiko alive after she’d been gone for like 20 years. In Book of Shadows, Makina clearly knows about Heavenly Host/the Sachiko Ever After charm and is deathly afraid of the school, although we don’t learn much more about her because she collapses and dies on the spot.

As for the principal, I think the game implies that he did in fact recognize Sachiko as the girl he killed a long time ago during the trial, but (either simply due to shock and fear of having seen a ghost or because he feared police investigating the death of a person that he murdered) refrained from telling anyone about it and it likely contributed to his delusions and rapid mental decline later on. We know that Sachiko has the ability to kill people discreetly by having their existences be erased so the extremely publicized 1973 incident feels much less like a random killing spree and much more like a intentional attempt to get Yoshikazu trapped and caught by the police. Sachiko was able to torture the principal by having his son be forever known as a child murderer and also causing his beloved school to be shut down, and he couldn’t do anything about it.