This sword stuff came out of nowhere, I feel like the author is just ham-fistedly setting up the next plot point.
I mean it came out of the dungeon and also serves as a prime example of showing off his power to identify and restore items.
What more do you want?
The reveal itself was fine if you ask me, but the question is, what is the point?
And why it was there and in such a bad condition is the real question tho.
It could have been anything if it was just going to be a random gift to get him laid.
So to connect it to some greater pantheon or religion as well as a former hero should serve a purpose down the line.
If not it's a huge faux pas on the "Chekovs gun" rule.
Hopefully, it's a setup for their reunion or a future event that has to do with the other angels down the line.
Or it could be foreshadowing the fact that the dungeon is much more important then others of its kind.
Who knows, maybe the hero´s corpse is a floor boss in the dungeon and there is some great evil lurking down there.