I wouldn't use it - there are plenty of big weapons around and the game is fairly easy with those.
However, countering the effects of that sword wouldn't be difficult: just wear a constant restore health 10 pts item, and never unequip the weapon.
Without this trick the sword is useless: it should be equipped when needed and unequipped when not in combat, but the 300 hp whack prevents you from doing that - useless.
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Never attribute to malice that which can be ascribed to sheer stupidity
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