I agree that it is a bit underwhelming because a +1 weapon isn't all that special, but I think some of you are blowing things out of proportions by saying Larian are trying to make a joke at your expense. The sword resembling Excalibur is more of an easter egg or a hint to the tale rather than a joke.
Contrast that to getting heat metal as my bard and burning the devils hands right at the beginning of the game to get everburn, an absurdly powerful starting greatsword for doing almost nothing except for maybe save scuming to get the role I need for heat metal to land.
You can't do this without mods, heat metal is a level 2 spell, so using the means the game gives you naturally, killing Zhalk to get his sword is considerably harder.
