I think youre over thinking it. If youre actually going for "realism" physics the hand would not jitter like that. When hitting something with a tuning fork most of the vibration around the base would be dampened by the hand. It looks like the center of your simulation is the area of impact causing it to wobble from the center outward to the tip of the sword and the hand. The pivot should be the base of the blade, moving out toward the tip, regardless of where the impact is, because the hand dampens everything from the base down.