So, when entering the Gladiatorial arena to defeat Waine, I noticed something funny. I had a friend attend the event with me and when I picked up Caladbolg, she became a target! Whilst the sword did 0 damage and we had fun jumping around like a couple of hooligans, I gave the sword to Branthyn and lo and behold! I could still hit her for real and do some good damage! That was for some good laughs, too.
Just a minor bug, not too major. But imagine the newly formed parties and friends leveling together. I could see some people killing other people because they can. xD