Varies from one place to another. Much of their sparring is "isolation"--they'll spar "alive" with a limited selection of tools in order to sharpen them. e.g. grappling, jab sparring, pummeling, dumog, etc.
They also do stuff that is "like" sparring but not:
numerata: one side feeds lines (attacks) to the other, kind of mechanically, like a ball cannon, the other practices response.
sumbrada: take turns feeding
One of my favourite paradigms at the moment is Straight Blast Gym. They teach in three stages.
Introduce - Just learning a technique. Resistance is gradually increased. Say, a guard sweep. The opponent gradually adds more energy, and the player has to find the right moment to slip it in.
Isolate - You work the guard position. You can kind of do whatever, and you work on pulling the sweep from there, creating the opportunity and exploiting it. But either of you can do other stuff too.
Integrate - You might be free grappling or even starting from stand-up. It's true sparring. If the opportunity presents itself, you want to do that sweep. But don't fixate on it.
Most use gear of some kind. Occasionally a FIST suit, but more often Thai pads (well for drills, not sparring--that would be in the "introduce" phase I suppose), focus pads, gloves of various kinds.
As to the NHB thing, sure some places to NHB every night. NHB/MMA schools for instance. Some JKD places too. People who are used to working with dead patterns are surprised when they see for themselves that you can train alive without people frequently getting hurt. We do. If I got hurt a lot, I'd obviously want to quit pretty quickly.
There are some branches of JKD where it all tends to be dead patterns, too.
Still others go beyond sparring into scenario-based simulation, like RBSD.
