I was taught many years ago by my Hung Gar instructor that when used as a greeting, this hand position signified that you are able to fight (indicated by the closed fist) and this is covered by the open hand signifying that you are not willing to fight and you come in friendship.
In terms of application from the forms, the same instructor stated that the meaning altered and indicated that you were involved in a grappling position. If the hands were held high, you were positioned high in a grapple i.e. around the neck, and if the hands were low then you were around the body/waist. This would have significance for the different positions in Bassai Dai, Jion, Ji'in and Empi etc.
I am not saying that this is absolutely correct, but it is food for thought...
passai, jion, ji'in, jitte, empi these all came from chinese forms, so to a point i agree, that it is a greeting, but with passai and empi i dont see it as being a greeting at all due to the hand postion,
regardless i always teach the opening moves as grappling techniques.
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