Actually on further testing, I think it is goes into Incarnon mode, but doesn't reflect the wording in the UI like it does for other weapons.
You can see the combo counter shimmer when the transformation is ready.
If I change the evolutions to Swift Transmute and vice versa, you can see that the shimmer only appears on 3 or 5 combo respectively.
When you heavy attack, you can hear the transformation noise but the UI doesn't update. You can however see the slight changes to the weapon itself.
You can also see that after 90 seconds, it goes back to normal.
I've used it in Steel Path Duviri Circuit, and it does kill reasonably quickly.
Therefore, this bug is really about the UI not updating when you enter Incarnon mode.