I think some of that is a matter of definition of the term "sparring". It sounds to me like you use it like we'd use "scrimmage" in soccer. You can scrimmage during practice, or even with another team, but it's not taken very seriously. The rules may be entirely the same, but it's not really the same intensity as playing a "real" game. Under that kind of definition of sparring, it is distinctly different from competition.
I use "sparring" to refer to two people trying to hit each other, etc., in the context of MA. It can be light and technical, or can be for knock-out. The latter would have a lot more similarity with a full-contact competition than with anything else in the training hall.
I agree, and what I'm saying is that trying to survive in a competition when the other person is determined to knock you out is not so different than trying to survive on the street when someone is trying to kill you. Fighting is fighting. Anything less than trying to take the other guy out in sparring, is training as shortbridge described it. A boxer or kickboxer or MMA guy wouldn't be expected to fight much differently in a "self-defense" situation than he would in the ring.