Kuruni and Fissel's reactions when he touched the sword could be a lot of different things, but my bet is 'fear'. Kuruni even seems to be panic laughing.
Why fear? Both of them trained under him for seemingly several years, and he seems to, both then and now, always try and maintain a gentle aura, befitting a caring teacher. They know (knew) his strength, but also know (knew) that he wouldn't ever misuse his strength. They could spar with him and feel quite safe, and even probably make mental plans and strats as possible methods to possibly even win a match with him eventually.
But now, in this situation, he is someone they do not know. He is on a path to not defeat someone, but to destroy someone, to end them. This is a cold wrath they have never felt from him, and he is focused on his task in a way they have never seen. And when he touched that sword, whether by their sharpened senses as fellow swordfighters, or just plain knowledge of the power of magic weapons, they knew that he just became something that they have no scale of reference against. Their dear teacher has changed in two very significant ways, without warning, right in front of them. If they get in his way, would he kill them? Could they even attempt to defend themselves from him now? They can make guesses, but they also have no assurances, and being within cutting range of someone you couldn't beat before, who is so angry he seems like a different person, and is now holding a magic sword is going to be a scary situation.