Honestly, i believe this is not bug ... but its intented. If you think about it, that sword is actualy burning, permanently ... and its not just gamemechanic effect, its written on its description ... it kinda makes sence, that your character dont want to put it on his, or hers back.
I still dont understand why cant we change Race for our hirelings. Lets us play Githyanki as racist as they trully are!