Having used to be that bum, yes, I can say emphatically what they're doing is evil by conventional standards. I agree wholeheartedly with what they do, but that doesn't change the fact that it's evil and by that game's standards they should die.

Items like that go by the standards established in the game and that means that homeless dude is gonna die. Conventional western morals dictate he be jailed, at least, and most Americans do want people like that exterminated because they dehumanize the homeless. Even restorative justice types don't actually view or treat homeless people like humans let alone peers. Homeless populations are pretty universally reviled, and as good and evil always boil down to our feelings and popularity contests, that's what makes them evil in the eyes of others.

I am not agreeing with the notion, just saying what it is. Personally I think humanity is inherently evil so all humans should die from such an item or a spell. But no one would take my opinion into account so this morality-is-relative crap people are pulling to dispute the veracity of the sword doesn't hold water either.