My current guess for Bit2 is that Giants (well, maybe specifically Ogres/Mad Ogres) tend to target the wielder of said weapon. If Hand Axe weren't a dummied item, it would be usable by Cid so he could hold a shield as well. However, Hand Axe doesn't happen have the Giants attribute, but I get the feeling that this would have hurt Cid (while in the Dark Elf's Cave), given how he's built to simply take damage up the ass.