Why The Oni's Katana looks like that:
That's because it's a kodachi. This was used by samurai of feudal Japan, the time period Kazan is from. This is his sidearm, with his primary weapon being his kanabo, which were also used by samurai at the time to fight against people who wore armor, since a katana cannot penetrate armor.
You can see here that the samurai has both a kanabo and a kodachi.