It depends on your definition of "live sand." It will still function fine as a surface area for bacteria to grow...but in terms of its functionality say as a deep sand bed - or in cultivating pods, worms, etc that assist in eating debris, that is another question.
One issue with sandsifter stars is that rarely, IME, will they take to spot feeding. THis is why they are often doomed in smaller tanks, or those tanks without a lot of surface area of sand.