What an interesting story. It's about swordsmithing. The art of making weapons nowadays has become obscure, but once upon a time, swordmaking was just as important as swords themselves.
Kuuei, even in that one moment he saw Nanpuu making that sword, saw a sword of immense beauty, and now he's become even more motivated to surpass Nanpuu. I'm amazed at how Nanpuu become motivated again. Even with just one arm he surpassed his old work.. I guess the right trigger can do so much to a person. Amazing what he could do even with metal that wasn't proper for swords.
Heihachi did a terrible thing by asking people to break the sword. But I guess in a way, Kuuei did end up killing Nanpuu. Because Nanpuu worked so hard to make a sword that Kuuei would use to kill him, and he never stopped, even in the flames of death.