I think the sword's story is being misunderstood here. It isn't a situation where the Hero's sword is meant to handle a greater threat or that it's meant to inspire. This manga seems to be another one of those "breaking the cycle" stories that we have seen a lot (like Maoyuu Maou Yuusha or Futami Sui's Sekai Maou) but from a different and rather radical perspective. The other manga of this genre and style usually have the REAL hero and the real demon king cooperating somehow to break the cycle, but Frieren is approaching this very differently, with a "fake" but TRUE hero succeeding in doing what should have been the "real" hero's job and his party members continuing on to wreak havoc upon whatever the original design of the world had been, years later. Himmel might be dead, but Frieren got humans developing anti-demon magic, Heiter trained up a support mage for her, and Eisen both sent her on her current journey and trained up a warrior bodyguard for her. So the cycle is being broken by the legacy of a "fake" hero that turns out to be the truest Hero of them all.