I think you missed the point of the exercise.
The Paladin is using the sword in place of a moral compass. They stab people upon first meeting and trust that anyone who dies deserved it. If the sword weren't good aligned, this would be heinous behaviour.
So make the sword evil. How long does it take for the Paladin to stop doing evil deeds in the blind belief that they're doing good? Does the Paladin take responsibility for stabbing random townsfolk, or do they try to blame something else for their actions? Does the Paladin just straight up fall to evil, supporting wicked people in the blind belief that they must be the real good guys?