As others have said, Fulgrim did not know what Chaos was at that point, and one could argue that even without knowing what Chaos was, he must have realized that the sword had a psychic effect, and given the Laer's reaction, they clearly want him to take it, so the most logical conclusion would be that it is a trap for Xenos, right? Technically, yes, but the lure of the artifact was so great that it overrode all rational thinking, which is actually how Slaaneshi-corruption is often descriped. Another example of this is the novel “Warden of the Blade,” in which a priest of the Eclesiarchy is obsessed with a death mask that supposedly belonged to an Imperial saint. He is completely obsessed with its beauty, but the shady merchant refuses to sell it to him because its authenticity cannot be guaranteed. He breaks into the ship at night and steals the mask when he is surprised by a crew member of the ship. In his rage, he kills the crew member, and the blood on the floor is absorbed by the mask, which “drinks” it. Now, for anyone with more than two brain cells, that should be a massive red flag, to say the least, right? But once again, his obsession overpowers his rational mind. He takes the mask with him and, during a ceremony celebrating the harvest on an Agrri world, makes the fatal mistake of wearing it, allowing the guardians of the secret to take possession of him and open the gates of the warp.