You don't like option #3? :<
1: We wouldn't just throw the sword away and let someone else start messing up with it.
2: We wouldn't just trade the sword away to someone that actually wants an evil sword unless they were like, some kind of paragon of goodness and were very powerful etc. Demigod tier.
3: We'd totally destroy that shit.
4: Why would we ever do this ever?
5: We've been trying to do this. It hasn't been working.
6: If Veekie were okay with this? The planes might be a place where this could actually be accomplished.
7: The party's not going to just let Alyssa run off with the sword when she has already caused so much trouble with it.
Zeni's current plan is to demand Alyssa unbind and relinquish the sword as soon as they step onto the other side of this gate. The prophecy is too close to total fruition and with the way Alyssa's been acting its like she's possessed by it and has been out to fulfill the prophecy on purpose. Being the most evil character in the party and still having such big problems with this, she's relatively certain Lien and Ellis will have her back. If this results in PVP, then that's simply how the story plays out, but that's not at all the plan.
Unless Alyssa actually is possessed by the sword (which veekie says she isn't), then she should see reason in being safe and giving it up, at least for now. From there, the party will be on the lookout for a replacement, and well, Zenievil, even if we had to trick/murder some other good adventurers to get Alyssa a new nice weapon, she's up for that (DanMachi style! You'vebeenwatchingthat,right?). Depending on the adventurers ofc. If we found someone wanting to trade for the evil sword who didn't meet the above criteria, she'd be up for murdering them too, Lien might even be up for that! Alyssa can bind any weapon and turn it into any other kind of weapon, so its not like we have to be on the lookout for a rapier or anything. Any powerful melee weapon will do just fine.
And questions for Veekie: I know that fire elementals won't like Zeni carrying a staff composed of elemental water into their border region, but would the earth elementals give a damn about it? Would they like it? Would stowing it in the bag of holding affect anything?
... Is using fireball to open the gate going to upset the earth elementals right beside us? I don't really imagine so, but just being safe, Zeni's knowledge roll should give her at least a hint on that.