Hanji, Balbir ji you have understood it correctly.
In my opinion, he meant that sword is a metaphotical meaning of Akaal Purakh. Just like Dayalu, kripalu, etc. Sword here means the shakti.. in simple terms, that One is the shkati or power or cause for everything. How? Thats explained in whole Gurbani.
Don't take sword to be literal, its like saying Balbir Singh is like his father, does it mean you have become "father"? No. That means you just have some characteristics (shakal soorat, or chaal, or the way you talk, etc) which is similar to your father.
Hence, generally the Nihang samprada, being trained in martial arts, relate 1 with the sword (shakti) in just a pictorial metaphor, because its in their nature. A businessman, will try to see profit/loss in daily activities, while a scientist wud try to reason, hence a martial artist would try to see martial aspects and be happy
Again you are taking it literally. For example, there is nothing wrong if someone says steam, ice, waves, drops, ocean is nothing but water from the substratum point of view. Similalry, everything is 1, because that 1 = Brahm, is the substratum, or basis, of everything in this universe. How? Again Gurbani further explains that.
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