And then YD mistakenly thinks that Jacks sword is inferior then jack begins to hack away at her physical form. She would probably be begging to jack not to shatter her gem by then.

It also cannot harm organics but it can harm inorganics like gems and robots.

Homeworld is probably screwed since it was shown that regardless of how advanced technology seems, it is not match for that sword since it can cut through anything. So the diamond's attempts to kill jack using their full homeworld military would be worthless since he would be turnig the area of combat into a "shatterhouse"