That sword makes absolutely jack zero sense and would be massively broken in any world. The Giant Guild member was explicitly not hostile to Grid. Only Grid viewed ANY of them as an enemy. And he apparently viewed all of them as an enemy, so he got the attack bonus for all of them.
He could literally view the entire world as his enemies, get a massive attack boost, and then kill one single target before changing his mind. This is kind of crap.
Other than that, I kind of dislike how the story is going, but that's just me. I actually don't really like the Tzedakah Guild (I don't like the Giant Guild either, but that's separate).