Seriously? There's even a debate about this?
1. You may carry a firearm openly in Kentucky, with or without a CCDW permit.
2. There is no such thing as a "four step" rule. What in the holy hell are people making up these days? As long you can articulate that you were in danger of death or serious physical injury, you can use deadly force.
The laws concerning deadly force and how one is allowed to carry a firearm are quite clear for our state. "Brandishing" isn't even a crime, and I'd love for one of these "instructors" to show me that particular charge in the Revised Statutes.
Yeah, if you wave your gun around at someone, without a very good reason, you'll likely end up in jail. The charge will probably be "wanton endangerment 1st", though. But, if you have a good reason (life was in danger, someone was trying to rob you, etc), not much will happen...not even in Louisville.
Please refer to KRS 237.110 for further information on the CCDW permit, or to chapter 527 for firearms violations. Alternatively, there's a wealth of information at www.kentuckystatepolice.org
Enjoy, and carry all you want. I'm a very strong supporter of law-abiding folks carrying as much as they want, in as many places as they want. Typically speaking, permit holders aren't the bad guy, although there have been instances of them going off the deep end. To be fair, some of the people in my line of work have done the same. In any case, I prefer to give good people the benefit of the doubt.